7179 


•NRLF 


SB 


GIFT 


The  Practical  Results  of 

Workingmen's   Insurance 

in  Germany 


BY 

DR.  FERDINAND  FRIEDENSBURG 

PRESIDENT  OF  THE  SENATE 
IN  THE 

Imperial  Insurance  Office  (Retired)  of  Germany 


Translated  from  the  German  by 

LOUIS    H.    GRAY,    Ph.D, 


Compliments  of 

The  Workmen's  Compensation   Service 

and  Information  Bureau 
1    Liberty  Street,   New  York  City 


The  Practical  Results  of 
Workingmen's  Insurance 
in  Germany 


BY 

DR.  FERDINAND   FRIEDENSBURG 

PRESIDENT  OF  THE  SENATE 

IN    THE 

Imperial  Insurance  Office   (Retired)  of  Germany 


Translated  from  the  German  by 

LOUIS  H.  GRAY,  PH.D. 


October,  Nineteen  Hundred  Eleven 


NOTE 

MUCH  has  been  written  in  praise  of  Germany's  system  of  com- 
pensating workmen  for  accidents.  The  idea  has  generally  been 
given  that  the  working  of  the  system  was  well  nigh  faultless,  and 
that  no  evils  had  crept  in  to  offset  ever  so  slightly  the  benefits. 

But,  while  wishing  that  Germany  had  indeed  solved  the  prob- 
lem, many  have  had  a  suspicion  that  larger  claims  were  made  for 
the  system  than  were  warranted.  That  this  suspicion  was  well- 
founded  is  now  proven  by  the  publication  by  Dr.  Ferdinand 
Friedensburg,  who  recently  retired  from  the  post  of  President 
of  the  Senate  of  the  Imperial  Insurance  Office,  after  a  service  of 
over  twenty  years,  of  an  article  bearing  the  title  Die  Praxis  der 
deutschen  Arbeiterversicherung  ("The  Practical  Results  of  Work- 
ingmen's  Insurance  in  Germany"),  and  who  criticizes  the  system 
severely  in  certain  respects. 

References  to  this  article  from  The  New  York  Times  and  The 
Spectator  (London)  are  presented  herewith. 

In  offering  these,  it  is  not  intended  to  take  a  position  antago- 
nistic to  workmen's  compensation  for  accidents.  We  are  heartily 
in  favor  of  workmen's  compensation.  All  that  we  mean  to  do  is 
to  point  out  the  necessity  of  care,  in  adopting  a  system  of  work- 
men's compensation,  that  the  workmen  are  not  pauperized  or 
exposed  to  the  temptation  to  make  fraudulent  claims. 

THE  WORKMEN'S  COMPENSATION  SERVICE 

AND  INFORMATION  BUREAU. 
October  19,  1911. 


236774 


AUTHOR'S  PREFACE 

THE  great  demand  for  my  monograph  on  "The  Practical  Re- 
sults of  Workingmen's  Insurance  in  Germany,"  which  first 
appeared  in  the  Zeitschrift  fur  Politik  (Vol.  IV,  1911,  Parts 
2-3),  has  led  the  publishers  to  issue  a  separate  edition  of  it,  thus 
affording  me  a  welcome  opportunity  to  broaden  and  to  deepen  my 
article  in  several  places.  This  does  not  imply  that  I  was  obliged 
to  cancel  or  to  modify  any  of  my  statements,  but  the  numerous 
criticisms  with  which  I  have  been  favored,  both  in  printed,  written, 
and  verbal  form,  have  shown  me  that  here  and  there  I  was  not 
sufficiently  explicit,  and  was,  accordingly,  misunderstood;  while 
I  myself  have  judged  other  passages  to  need  improvement  in  the 
new  form  which  every  work  assumes  in  print,  even  for  an  experi- 
enced author.  A  special  advantage  was  that,  now  for  the  first 
time,  I  could  avail  myself  of  the  report,  as  comprehensive  as  it  is 
profound,  published  by  the  Imperial  Insurance  Office  in  the  third 
volume  of  its  "Handbook"  (the  third  edition  of  which  has  just  ap- 
peared) under  the  title  Geschichte  und  Wirkungskreis  des  Reichs- 
Versicherungsamts.  I  emphasize  this  fact  with  the  greater  pleas- 
ure since  it  renders  nugatory  the  allegation  that  my  monograph 
was  written  to  attack  or  to  weaken  this  most  magnificent  work. 
On  the  contrary,  I  am  happy  to  find  that  this  report  itself  recog- 
nizes that  a  large  portion  of  my  strictures  are  justified,  and  that 
it  acknowledges  the  existence  of  many  of  the  abuses  of  which  I 
have  complained.  For  this  reason  the  points  in  which  I  agree 
with  the  Office  now  receive  a  special  stress. 

Apart  from  this  official  report,  I  have  not,  I  regret  to  say, 
been  able  to  glean  much  supplementary  material  from  the  criti- 
cisms of  my  article  which  have  thus  far  been  published.  As 
to  the  foul  invectives  which  have  appeared  in  the  Social  Demo- 
cratic ,  press,  I  can  not  lower  myself  so  far  as  to  consider  them, 
excepting  as  a  welcome  proof  of  the  entire  justice  and  the  solid 
foundation  of  my  charges. 


REVIEW   OF    DR.    FRIEDENSBURG'S    BROCHURE   IN 
"THE   NEW   YORK    TIMES." 


have  heard  much  of  the  beneficent  working  of  the  German 
laws  for  the  insurance  of  working  people  from  the  cost  of  accident 
and  illness.  In  theory  it  is  a  sound  system,  since  it  aims  at  the 
governmental  regulation  and  protection  of  the  insured  from  funds 
distributed  according  to  accepted  principles  of  insurance.  It  is 
thirty  years  since  the  system  was  established.  A  correspondent 
of  The  Spectator  of  London  summarizes  an  important  document 
throwing  a  good  deal  of  light  on  the  actual  operation  of  the  sys- 
tem. This  is  an  article  in  the  Zeitschrift  fur  Politik,  by  Herr 
Ferdinand  Friedensburg,  who  recently  retired  from  the  post  of 
President  of  the  Senate  of  the  Imperial  Insurance  Office,  after  a 
service  of  twenty  years.  It  is  practically  a  series  of  charges  of 
which  these  three  are  the  most  significant  : 

"The  first  is  that  the  State  insurance,  specially  designed  to  replace 
pauperism  and  charity,  is  itself  merely  pauperism  under  another  form. 
The  second  charge  is  that  it  has  fostered  to  an  incredible  extent  the 
German  evil  of  bureaucratic  formalism.  The  third  and  the  worst  charge 
is  that  it  has  become  a  hotbed  of  fraud,  and  therefore  a  spreader  of 
demoralizing  practices  and  ways  of  thought. 

"As  to  the  first  charge,  he  alleges  that  almost  from  the  begin- 
ning it  was  found  difficult  to  secure  fair  and  honest  adjudication 
of  claims.  The  principle  of  giving  the  benefit  of  doubt  to  the 
claimant  came  into  early  operation,  and  the  claims,  under  its 
insidious  influence,  multiplied  in  number  and  became  less  and  less 
valid.  'The  workmen  began  to  come  as  beggars  asking  and  ex- 
pecting the  insurance  laws  to  be  stretched  in  their  favor/  The 
expenses  of  the  system  continued  to  grow  as  the  force  required 
increased. 

"The  number  of  officials  in  the  Imperial  Insurance  Office  has  multi- 
plied in  tune  with  the  ever-waxing  burden  of  work,  so  that  in  the 
estimate  year  1909-10  it  had  risen  to  sixty-three  permanent  members, 
in  addition  to  the  President,  the  two  Directors,  and  ten  assistants; 
while  the  number  of  judicial  assessors  has  increased  from  four  to  no 
less  than  ninety-nine.  In  the  provinces  the  best  voluntary  social  workers 
have  withdrawn  in  disgust,  leaving  the  administration  of  the  industrial 
insurance  funds  to  become  more  and  more  professional  and  bureaucratic. 

"Not  only  has  the  force  increased,  but  under  the  pressure  of 
the  claimants  it  has  become  inefficient  and  wasteful,  so  that  the 


general  costs,  per  insured,  have  increased  50  per  cent,  since  Herr 
Friedensburg  has  been  in  the  service,  while  the  work  of  inspec- 
tion and  regulation  undertaken  by  the  Government  has  steadily 
deteriorated. 

"Some  of  the  incidents  related  by  Herr  Friedensburg  will  remind 
American  readers  of  the  history  of  our  Pension  Office  and  pen- 
sion laws.  New  classes  of  'parasitic  lawyers'  have  sprung  into 
activity,  inventing  and  pressing  claims,  and  neighborhood  doc- 
tors, whose  scruples  will  not  permit  them  to  sustain  such  claims, 
are  boycotted  and  threatened  with  ruin.  The  ingenuity  of  the 
claims  is  often  not  so  remarkable  as  their  impudence.  Agricul- 
tural laborers  are  especially  kindly  regarded.  To  get  admitted 
to  that  class,  one  man  claimed  that  he  was  chopping  wood  to  heat 
fodder  for  cattle  when  his  accident  occurred.  Another  put  in  a 
claim  even  more  remote  and  curious.  He  was  by  calling  a  coach- 
man, and  he  alleged  that  at  the  time  of  his  accident  he  was  driv- 
ing to  church,  'to  pray  for  rain  for  the  crops/  If  these  ridiculous 
and  false  claims  were  simply  made,  exposed,  passed  on,  and  de- 
nied, the  expense  to  the  State  would  be  extravagant.  But  a  suffi- 
ciently large  percentage  of  them  are  admitted  and  paid  to  make 
a  most  mischievous  effect  on  the  general  morality.  We  know  by 
sad  experience  how  corrupting  our  pension  system  has  become. 
The  cause  and  principle  of  corruption  in  the  German  insurance 
system  are  essentially  the  same,  and  the  field  of  operation  is  far 
wider  as  well  as  more  permanent." — The  New  York  Times,  July 
9,  1911. 


REVIEW  OF  DR.  FRIEDENSBURG'S  BROCHURE  IN 
"THE  SPECTATOR"  (LONDON). 

"THIS  remarkable  brochure,  which  is  a  reprint  of  an  essay  from 
the  last  number  of  the  Zeitschrift  fur  Politik,  was  described  briefly 
in  a  letter  in  The  Spectator  of  June  I7th ;  but  both  for  its  intrinsic 
interest  as  an  expert's  view  of  German  social  legislation  and  for 
its  bearing  upon  British  legislative  proposals  it  deserves  fuller 
treatment.  The  purpose  of  Privy  Councillor  Friedensburg  is  to 
expose  the  abuses  of  German  State  insurance  as  it  has  miscarried 
in  practice,  and  not  at  all  to  express  any  opinion  on  its  underlying 
principles.  His  indictment  deals  with  a  great  many  evils,  and  is 
extremely  complicated  and  technical ;  but  he  explains  at  the  begin- 
ning that  all  the  evils  arise  from  the  one  fact  that  the  various 
State  insurance  systems  have  been  administered  in  a  spirit  of 
charity  which  is  flatly  opposed  to  the  intent  of  the  original  pro- 
jectors. 'The  legal  character  of  the  whole  of  our  working-class 
insurance,'  he  says,  'has  not  been  realized  as  a  living  fact;  and 
that  is  the  root  of  the  whole  evil/  By  'legal  character'  he  means 
that  the  relations  between  workmen  claimants  on  the  one  hand 
and  the  pension  funds  on  the  other  were  framed  according  to 
juristic  conceptions.  State  employers  and  workingmen  were  all 
partners  in  a  common  enterprise,  and  their  various  rights  and 
obligations  were  rigidly  regulated.  This  intention  was  accentu- 
ated by  the  fact  that  the  procedure  established  for  settling  pension 
and  compensation  disputes  was  borrowed  in  the  main  from  the 
civil  code.  The  conception  of  beneficence  was  explicitly  ex- 
cluded. The  insured  workingman  was  given  specific  rights, 
which  he  could  enforce  in  the  courts,  but  he  could  not  claim  more. 
If  he  did  make  such  a  claim  the  pension  arbitrators  and  judges 
could  no  more  allow  it  out  of  a  spirit  of  indulgence  than  a  judge 
in  an  ordinary  civil  court  could  decide  against  the  evidence  merely 
because  the  party  in  the  wrong  appealed  to  him  for  sympathy. 

"That  theory,  says  Dr.  Friedensburg,  has  been  ignored  in  prac- 
tice. Charity  crept  in  and  corrupted  the  system  at  the  beginning. 
The  insurance  judicature  held  that  'in  granting  pensions  there  is 
needed  only  a  special,  less  convincing  kind  of  proof.'  Considera- 
tions, 'proper  in  a  poor-law  administrator  but  not  in  a  judge/ 
governed  their  decisions.  The  State  further  made  the  mistake 
of  propagandizing  in  a  costly  way  for  the  new  institution.  'With 


full  hands  enormous  sums  were  scattered  in  order  to  familiarize 
the  people  with  the  pension  idea.'  The  insurance  judges,  includ- 
ing the  supreme  Imperial  Insurance  Office,  began  by  treating 
the  workmen,  not  as  litigants  to  be  handled  impartially,  but  'as 
ill-reared,  fractious  children,  who  could  easiest  be  reformed 
through  kindness/ 

"  'The  workmen  very  soon  got  accustomed  to  bringing  their  com- 
plaints, doubts,  and  claims  of  all  natures  whatsoever  to  the  Imperial 
Insurance  Office,  often  without  appealing  to  any  intermediate  instance. 
The  number  of  these  appeals  grew  from  304  in  1887  to  3,303  in  1909. 
.  .  .  .  Many  documents  teemed  with  insults,  threats  to  appeal  to 

the  Emperor,  to  Bebel,  to  the   Vorwdrts In  this  wise  there 

develops  an  absolutely  monstrous  quantity  of  clerical  work  (geradezu 
ungeheuerliche  Vielschreiberei) .' 

"Of  late  years  the  craze  for  litigation  over  Pension  and  Com- 
pensation matters  has  become  extraordinary : — 

"  'This  easily  explains  why  in  1909,  out  of  422,076  decisions  by  the 
industrial  unions,  76,352,  that  is,  18.9  per  cent,  have  been  appealed 
against;  that  of  the  roughly  100,000  arbitration  judgments  22,794,  that 
is,  27.74  per  cent.,  were  fought  further.  The  figures  for  Invalidity  and 
Old  Age  are  not  much  better.' 

"The  Imperial  Insurance  Office,  which  is  intended  to  handle 
questions  of  law,  is  overburdened  with  frivolous  and  unfounded 
claims.  The  problem  of  the  exact  amount  of  compensation  'for 
a  twisted  thumb*  is  fought  until  it  reaches  this  highest  Court : — 

"  'No  less  than  77.7  of  the  appeals  to  the  highest  instance  in  1909 
were  on  the  question  of  the  exact  amount  of  a  claimant's  loss  of  earning 
power How  greatly  the  claims  for  trifling  injuries  have  in- 
creased is  shown  by  the  fact  that  from  1888  to  1908,  despite  the  increase 
of  the  total  compensation  paid  from  5,900,000  marks  to  155,100,000  marks, 
the  average  compensation  per  accident  fell  from  232.19  marks  to  155.53 

marks There  are  men,  particularly  among  the  wood-workers, 

who  for  three  or  four  different  injuries  of  a  kind  very  common  in 
their  occupation  draw  part  pensions  of  305.,  403.,  or  more,  and  yet  are 

earning  their  full  wages It  is  no  wonder  that  the  number  of 

accidents  grows  with  monstrous  speed.  In  1886  100,159  accidents  were 
reported,  and  10,540  compensated;  in  1908  the  figures  were  respectively 
662,321  and  142,965.' 

"This  is  due,  in  part,  to  the  leverage  which  an  'accident'  gives 
to  a  chronically  sick  man  to  get  permanent  support.  'Often  an 
accident  is  actually  sought  for  and  arranged.'  The  'victim'  swears 
that  his  old  illness  is  the  result  of  the  'accident'  and  gets  conse- 
quential help.  Whole  pages  of  Privy  Councillor  Friedensburg's 
book  deal  with  similar  frauds.  'It  is  a  common  experience,'  he 

10 


says,  'to  find  workmen  doing  everything  possible  to  foster  their 
illnesses' : 

"  The  doctor,  usually  regarded  as  the  sick  man's  best  friend,  becomes 
his  worst  enemy.  The  most  embittered  quarrels  rage  in  the  sanatoria,  and 
complaints  and  grumbling  over  spoiled  food  and  bad  treatment  appear, 
of  course  anonymously,  in  the  form  of  newspaper  articles/ 

"This  last  is  a  characteristic  feature  of  all  pauperizing  enter- 
prises. But  at  heart,  says  Dr.  Friedensburg,  workmen  prefer 
the  hospitals  and  sanatoria  to  their  own  homes,  'and  no  longer 
feel  well  at  home,  but  continue  to  hanker  after  the  flesh  pots  of 
Egypt/  The  laxity  which  has  neutralized  the  benefits  of  State 
insurance,  however,  is  not  confined  to  the  workman  and  to  the 
special  insurance  authorities.  The  employers  and  the  minor  local 
officials  have  fallen  into  the  same  pit.  The  legal  and  ethical  con- 
ceptions of  insurance,  as  an  institution  in  which  two  sides  are 
materially  interested,  required  that  employees  should  de  facto  pay 
their  shares  of  the  premiums  as  prescribed  by  the  law.  That  was 
essential  to  the  workingman's  self-respect.  It  has  not  been 
realized.  In  domestic  service  the  employer  out  of  a  sense  of 
charity  habitually  pays  both  halves  of  the  premium ;  and  many 
employers  of  industrial  labor,  especially  in  the  country,  do  the 
same.  The  local  non-pension  authorities  are  similarly  demoral- 
ized; and  they  oppose  the  basic  idea  that  State  insurance  is  a 
matter  of  legal  right  and  not  of  charity  or  of  class  exploitation : — 

"  'The  communal  chiefs  (Amtsvorsteherri)  act  entirely  under  the 
belief  that  they  ought  to  help  their  local  residents.  They  get  this  belief 
as  a  result  of  the  communis  opinio  that  the  insurance  funds  have  more 
money  than  they  know  what  to  do  with ;  and  this  idea  strikingly  deadens 
the  conception  of  legality  and  love  for  the  truth.' 

"Naturally  the  universal  laxity,  the  payment  of  unjustified 
claims,  and  the  extravagance  practised  in  equipping  hospitals  and 
sanatoria  impair  the  integrity  of  the  insurance  funds.  Employers 
do  all  that  is  possible  to  escape  their  burdens,  which  they  feel  to 
be  unjust,  and  in  vain  enormous  sums  are  annually  exacted  from 
them  in  fines.  The  higher  insurance  authorities  are  repeatedly 
being  called  upon  to  remedy  the  evils  due  to  such  causes : — 

"  'Only  those  who  have  taken  part  in  these  quarrels — I  might  call 
them  battles — have  any  idea  of  their  depressing  effect  and  their  costliness. 
This  alone  makes  it  understandable  why  industrial  unions  and  insurance 
institutions,  in  particular  those  at  work  among  the  agricultural  population, 
have  been  repeatedly  on  the  brink  of  bankruptcy.  To  effect  any  improve- 
ment in  their  position  there  are  needed  month-long  tours  both  of  the 
officials  of  the  organizations  themselves  and  of  the  officials  of  the  Im- 
perial Insurance  Office.' 

II 


"Dr.  Friedensburg  says  that  the  excessive  cost  of  the  insurance 
system,  which  is  one  result  of  the  degradation  of  the  system  into 
charity,  is  complained  of  by  employers ;  and  that  State  insurance, 
therefore,  reacts  injuriously  upon  the  Empire's  industry: — 

"  ^Unluckily,  it  is  just  the  middle  and  petty  employers  who  feel  as 
most  oppressive  the  percentage  increase  of  their  working  expenses  caused 
by  the  payments  they  must  make  to  the  various  systems  of  insurance. 
As  a  result  of  the  cost  of  insurance  which  has  gradually  become  mon- 
strous— it  amounts  to  2,000,000  marks  a  day — German  industry  is  put 
at  a  disadvantage  and  is  hampered  to  the  extreme  in  its  competition 
with  foreigners.  The  institution  is  held  first  of  all  responsible  for  the 
marked  rise  in  prices,  which  is  felt  as  oppressive  by  all  classes  of  the 
population/ 

"It  is  impossible  here  to  deal  with  the  evidence  given  by  Dr. 
Friedensburg  of  wholesale  dishonesty  and  of  the  painful  tolerance 
shown  by  the  public  to  frauds  against  the  Pension  Funds ;  that  is, 
against  the  State,  the  employer,  and  the  workman  as  the  three 
contributories.  Numerous  men,  he  says,  live  by  travelling  about 
the  Empire  fabricating  pension  and  compensation  claims  for 
others.  An  official  gives  false  evidence  for  a  claimant  on  condi- 
tion that  the  claimant  shares  the  proceeds :  he  is  sentenced  only 
for  'negligent  perjury/  No  serious  attempt  is  made  to  suppress 
insurance  frauds  by  penal  methods,  because  'if  all  the  untruthful 
statements  made  in  pension  matters  were  criminally  brought  be- 
fore the  Courts,  the  number  of  our  State  procurators  and  criminal 
judges  would  have  to  be  doubled  and  trebled/ 

"The  original  provision  that  claims  could  be  fought  cost-free 
was  so  abused  by  the  making  of  baseless  claims  that  it  had  to  be 
abolished  by  amendment  in  1900.  The  amendment  allows  the 
Courts  to  impose  costs  on  a  litigant  who  obstinately  persists  in 
hopeless  appeals.  But  the  Courts,  under  the  ban  of  'charity/ 
interpret  this  amendment  by  imposing  costs  upon  the  Pension 
Funds  when  these  are  the  losers,  but  by  allowing  costs  to 
litigious  workmen.  The  result  is  that  the  latter 

'come  with  absolutely  hopeless  claims  across  the  whole  of  Germany  to 
Berlin:  their  expenses  to  Berlin  are  borrowed,  but  the  cost  of  sending 
them  home  has  to  be  recovered  from  the  Poor  Law  administration, 
after  infinite  letter-writing,  explanations,  and  misunderstandings/ 

"It  is  curious,  in  view  of  the  careless  statements  which  are 
habitually  made  in  England,  to  find  the  'Poor  Law  administration* 
playing  this  important  role.  But  Dr.  Friedensburg  shows  that 
neither  of  the  two  evils  against  which  State  insurance  was  directed 
has  been  exorcised.  Class  opposition  (i.  e.,  Socialism)  has  not 

12 


been  weakened,  nor  has  pauperism  been  diminished.  In  February, 
1910,  the  Imperial  Secretary  of  State  for  the  Interior  admitted 
the  first.  As  for  the  promise  to  kill  pauperism,  'it  is  remarkable/ 
says  Dr.  Friedensburg,  'how  little  of  that  promise  is  heard  to-day.' 
He  refers  to  Herr  Zahn's  recent  study  intended  to  prove  the  con- 
trary, but  quotes  Herr  Zahn's  admission :  'In  reality  the  poor  ex- 
penditure, both  as  regards  the  number  of  beneficiaries  and  as 
regards  the  number  of  individual  allowances,  has  almost  every- 
where increased.' 

"The  system,  concludes  Dr.  Friedensburg,  is  a  circulus  vitiosus. 
Charity,  pauperism,  and  fraud  are  the  segments  of  the  circle ;  and 
'to  those  who  do  not  see  in  their  countrymen  a  mere  mass  it  is  a 
deeply  painful  experience  that  the  insurance  has  directly  led  to 
a  general  alienation  and  demoralization.' 

"Such  is  the  view  of  Germany's  social  legislation,  as  seen  by 
a  high  official  who  has  been  administering  it  for  twenty  years. 
As  to  how  far  it  can  be  taken  as  a  final  word,  and  a  sufficient 
demonstration  of  the  worthlessness  of  the  system,  the  writer  re- 
serves his  opinion.  But  it  is  at  least  a  remarkable  exposure  of  the 
delusion,  common  in  England,  that  the  German  system  is  so 
admittedly  and  unqualifiedly  a  success  that  it  is  outside  the  sphere 
of  native  criticism." — The  Spectator  (London),  July  I,  1911. 


THE  PRACTICAL  RESULTS  OF  WORKINGMEN'S 
INSURANCE  IN  GERMANY 

BY  DR.  FERDINAND  FRIEDENSBURG 
President  of  the  Senate  in  the  Imperial  Insurance  Office  (Retired) 

Translated  from  the  German  by  Louis  H.  GRAY,  PH.D. 

Amplified  Reprint  from  the  Zeitschrift  fur  Politik, 

Vol.  IV,  Parts  2-3 

THE  Imperial  Message  of  November  17,  1881,  constitutes  not 
only  the  Magna  Charta  of  labor  legislation,  but  also  the  scheme 
for  its  realization ;  and  when  it  is  combined  with  the  data  afforded 
by  the  various  laws  and  with  the  sessions  of  the  Reichstag,  it  ad- 
mits of  not  the  slightest  doubt  as  to  the  foundation  on  which 
workingmen's  insurance  was  intended  to  be  constructed.  The 
object  was  to  afford  "Government  protection"  to  workingmen 
who,  through  sickness,  accidents  incurred  in  their  occupations, 
invalidism,  or  old  age,  were  unable  to  gain  a  livelihood,  and  also 
to  their  dependents  and  survivors;  and  this  was  to  be  accom- 
plished "by  a  combination  of  the  material  forces  of  the  life  of  the 
people  under  the  form  of  corporate  associations  with  Govern- 
ment guarantee."  Strictly  speaking,  the  Message  created  no 
new  principles  of  law.  Corporations  had  always  existed  for  the 
promotion  of  the  best  interests  of  their  own  members  or  of  others, 
and,  like  all  other  legal  persons,  had  enjoyed  Government  guar- 
antee, sometimes,  it  may  be,  in  greater  measure  than  was  alto- 
gether agreeable  when  Government  guarantee  became  Govern- 
ment supervision.  Neither  was  the  concept,  nor  even  the  word 
"protection"  new.  The  common  law  of  Prussia  had  already 
spoken  of  the  special  "protection"  which  the  State  exercises  over 
such  persons  as  are  unable  to  provide  for  themselves ;  the  Servant 
Regulation  Act  of  1810  compels  masters,  under  certain  circum- 
stances, to  "protect"  sick  servants ;  similar  provisions  are  made  by 
the  laws  of  1842  and  1855  for  the  care  of  the  poor;  and  the 
Pensions  Regulation  for  Civil  Service  Employees,  promulgated 
in  1842  and  corresponding  almost  word  for  word  with  the  Im- 
perial Message  of  1881,  recognizes  the  regulation  and  the  protec- 
tion of  the  conditions  of  Government  employees  as  a  most  impor- 
tant matter  for  the  State  to  supervise.  The  term  "support," 
which  is  preferred  by  the  Sickness  Insurance  Law  and  which  is 

15 


also  employed  by  the  common  law,  was  used  in  the  Imperial 
Law  of  June  6,  1870,  referring  to  the  place  of  residence  of  those 
so  "supported."  It  occurs  likewise  in  the  Imperial  Trade  Regu- 
lation, and  it  is  significant  that  the  Marine  Accident  Insurance 
Law  designates  as  "protection"  those  services  to  which  seamen, 
in  case  of  sickness,  are  entitled  in  accordance  with  the  Commer- 
cial Code  and  the  Mariners'  Regulations.  The  only  thing  that 
was  essentially  new,  from  a  legal  point  of  view,  in  the  Imperial 
Message  of  1881  was  that  it  united  and  amalgamated  these  vari- 
ous concepts  and  components.  Under  no  circumstances  could 
there  be  any  doubt  that  the  German  Empire  here  desired  to 
establish  an  actual  legal  institution,  and  not  a  mere  government 
or  administrative  regulation;  and  it  was  equally  obvious  that 
this  creation  was  to  come  within  the  domain  of  private  law  in 
those  respects  which  were  most  essential  to  those  who  were  thus 
insured.  The  Empire  took  upon  itself  obligations  which  found 
their  counterparts  in  the  rights  of  the  insured,  and  it  created  for 
itself  rights  to  which  the  obligations  of  the  party  of  the  second 
part  corresponded. 

This  general  character  of  the  Imperial  Message  received 
sharper  expression  in  numberless  details.  On  the  one  hand,  those 
who  were  insured  shared  in  the  burdens  and  the  expenses  of  the 
insurance,  and  they  likewise  shared  in  the  management;  while 
the  insurance  carriers  were  empowered  to  impose  penalties  not 
only  upon  other  insurance  carriers,  but  also  upon  those  whom 
they  insured.  On  the  other  hand,  many  individual  requirements 
of  ordinary  civil  law  were  accepted,  such  as  forms  of  procedure, 
time  limitations,  exclusion  of  claims  on  account  of  non-use,  and 
the  like.  That  there  might  be  absolutely  no  doubt  as  to  the  rights 
of  the  insured  under  this  insurance,  not  only  did  he  possess  the 
power  to  prosecute  with  all  customary  legal  means  of  redress,  but 
a  strict  line  of  demarcation  was  also  expressly  drawn  between 
this  form  of  insurance  and  poor  relief;  for  it  was  enacted  that 
enjoyment  of  the  advantages  arising  from  insurance  should  not, 
as  was  the  case  in  application  for  poor  relief,  carry  with  it  diminu- 
tion of  civil  rights.  The  Imperial  Insurance  Office  subsequently 
made  an  additional  decision  by  which  it  recognized  the  claim  of 
the  insured  to  be  inheritable,  and  placed  such  claim,  in  this 
respect  likewise,  on  the  same  basis  as  a  private  right. 

With  marvelous  rapidity  all  these  new  laws  became  estab- 
lished— despite  their  truly  enormous  realm  of  activity  which,  in 
one  way  or  another,  affected  the  entire  nation,  despite  the  diffi- 

16 


culty  of  the  subject-matter  of  the  laws  themselves,  and  despite 
the  innovations  arising  from  a  large  number  of  special  require- 
ments. Theorizers  were  still  wrangling  over  the  legal  nature  of 
the  enactments,  not  only  as  a  whole,  but  even  in  regard  to  their 
component  parts;  and  the  laws  were  already  in  operation  as 
though  things  had  never  been  otherwise!  Those  were  noble  and 
instructive  days.  With  magnificent  zeal,  inspired  alike  by  theo- 
retical interest  and  warm  enthusiasm,  every  nerve  was  strained 
to  perform  the  task  set  by  the  Imperial  Message,  and  to  translate 
the  thought  of  protection  into  act.  The  legislator  certainly  did 
not  fail  to  grant  the  insured  all  legal  favor.  Wherever  possible, 
all  obstacles  to  the  realization  of  their  claims  were  obviated ;  they 
were  freed  from  all  so-called  legal  formalities.  In  a  word,  what- 
ever could  be  done  was  done  to  aid  the  spirit  of  the  law  to  tri- 
umph everywhere  and  to  help  the  insured,  under  all  conditions, 
to  secure  the  support  that  was  due  him.  The  insurance  organs — 
both  those  of  the  State  and  those  of  the  insurance  carriers — did 
even  more.  Free  from  all  bureaucracy  and  red  tape,  surrendering 
the  most  customary  and  most  common  formalities,  the  claimants 
for  pensions,  who  at  first  were  naturally  unskilled  and  ignorant 
in  this  respect,  were  assisted  to  validate  their  rights ;  they  were 
taught  unwearyingly,  while  judge  and  advocate  were  combined  in 
one  person. 

In  the  very  first  statistical  year  of  accident  insurance  (1886) 
15,863  pensions,  amounting  to  1,547,593  marks,  were  granted, 
this  including  indemnification  for  the  most  insignificant  injuries 
resulting  in  a  loss  of  3  or  5  per  cent,  of  earning  capacity.  Invalid 
insurance,  as  soon  as  it  went  into  effect,  paid  old-age  pensions 
to  some  130,000  persons  who  had  worked  within  the  three  years 
previous — a  gift  pure  and  simple.  Enormous  sums  were  scat- 
tered with  generous  hands  to  familiarize  the  people  with  the  idea 
of  insurance ;  and  in  investigating  the  legality  of  claims  for  insur- 
ance magnanimity  was  carried  to  such  an  extent  that,  on  the 
analogy  of  the  principle  in  dubio  pro  reo,  pension  claims  were 
recognized  in  cases  of  doubt,  simply  to  avoid  embittering  quarrels 
which  it  had  been  one  of  the  legislator's  most  cherished  aims 
to  avoid. 

This  fine  zeal,  which  saw  in  workingmen's  insurance  the  first 
ripe  fruit  on  the  tree  of  the  social  justice  of  the  future,  can  be 
the  object  neither  of  reproach  nor  of  scorn.  The  unselfish 
endeavor  to  realize  the  intentions  of  the  law  is  in  itself  a  proof 
of  the  idealism  inherent  in  strata  of  society  that  are  to-day  the 

17 


objects  of  much  contumely.  But  it  was  unwise;  to  quote  an  old 
adage  of  deep  significance,  "Less  would  here  again  be  more." 
In  any  case  pause  should  have  been  made  betimes,  that  habitua- 
tion  to  insurance  might  not  degenerate  into  pampering  through 
insurance.  First  and  foremost,  this  should  have  been  the  outlook 
of  the  insurance  carriers,  for  the  law  had  made  it  their  duty  to 
manage  the  funds  of  their  associations  like  good  guardians.  But, 
on  the  contrary,  the  extreme  concessions  made  to  the  insured 
resulted  in  the  necessity  of  ever-increasing  claims  on  those  circles 
whose  contributions  gave  the  requisite  funds.  This  has  recently 
been  proved,  with  special  reference  to  the  sick  funds,  in  most  care- 
ful and  suggestive  fashion  by  Privy  Medical  Councillor  Dr.  F.  Rit- 
ter,  of  Oldenburg  (Grenzbote,  1910,  No.  52),  who  has  shown  how 
— entirely  apart  from  deliberate  deception  and  shirking  of  labor — 
the  funds  suffer  from  the  continual  widening  of  the  circle  of  the 
insured,  not  only  through  the  inclusion  of  the  family,  etc.,  of  the 
insured,  but  also  because  insurance  continues  to  be  held  by  those 
who  had  been  expected  to  withdraw  as  their  incomes  increased, 
while  this  latter  class  is  precisely  the  one  which  lays  more  and 
more  claim  to  such  assistance,  both  in  kind  and  in  degree.  In 
consequence  of  the  noteworthy  rise  of  wages  in  recent  years  the 
contributions  to  invalid  insurance  have  naturally  increased;  and 
as  regards  accident  insurance  it  need  only  be  said  that  the  total 
disbursements  of  the  Trades  Associations  have  risen  from  2.57 
marks  for  each  man  insured  and  19345  marks  for  each  accident 
reported  in  1888  to  7.40  and  303  marks,  respectively,  in  1908. 
It  would  accordingly  seem  that  the  real  limit  of  endurance  has 
now  been  reached,  if,  indeed,  it  has  not  already  been  exceeded. 

Unfortunately,  the  employers  of  moderate  or  of  scanty  means 
are  the  very  ones  from  whom  the  contributions  to  the  various 
classes  of  insurance  exact  a  percentage  of  running  expenses  that 
becomes  more  and  more  oppressive.  Unlike  larger  firms,  they 
are  unable  to  recoup  themselves  by  their  power  to  set  prices, 
which  are  determined  independently  of  them;  and,  although 
relatively  few  complaints  have  thus  far  been  heard  from  these 
circles,  this  is  very  possibly  because  the  more  personal  contro- 
versies between  employer  and  employee,  which  in  the  labor  world 
are  the  characteristic  of  the  time,  give  rise  to  even  more  bitterness 
and  anger  than  these  contributions  to  the  Trades  Associations. 
Only  recently  the  Prussian  Minister  of  Finance  has  shown,  by 
actual  statistics,  how  the  workingman  submits  to  a  taxation  by 
his  "colleagues"  that  would  undoubtedly  drive  him  to  revolution 

18 


if  it  were  the  State  that  levied  it.  An  additional  factor  is  terror 
of  the  Social  Democrats ;  and,  in  pursuance  of  a  train  of  thought 
that  was  vaguely  felt  by  the  original  legislator,  and  which  we 
shall  consider  again  at  the  close  of  our  study,  it  was  believed 
that  the  threatening  perils  of  Social  Democracy  might  be  averted 
by  contributions  toward  the  insurance  fund — that  the  working- 
men  might  be  bought  off,  so  to  speak,  from  revolution.  The 
extreme  unwillingness  to  incur  disfavor  with  this  party  is  clearly 
shown  by  the  attitude  of  a  witness  in  the  Moabit  Riot  trial,  who, 
when  asked  if  he  belonged  to  it,  first  answered  with  a  decided 
denial,  then  declared  that  he  did,  and  ended  by  saying  that  he 
"belonged  to  no  party." 

As  early  as  February  4,  1890,  an  Imperial  Decree  emphasized 
the  necessity  of  "so  maintaining  German  industry  that  it  may 
compete  with  the  markets  of  the  world,"  this  solicitude  being 
based  on  the  incontestable  statement  that  "Decrease  of  home 
industry  through  loss  of  foreign  trade  would  deprive  of  bread 
not  only  the  employer,  but  also  the  employee."  The  instigations 
of  the  Social  Democrats  have  apparently  blinded  the  working- 
men  to  the  fact  that  it  is  poor  economy  to  kill  the  goose  that 
lays  the  golden  egg;  but  recently  there  has  become  audible  an 
increasing  volume  of  protest  from  large  organizations,  worthy 
of  respect  in  every  way,  that  authoritatively  voice  the  complaints 
of  the  tradesmen,  both  small  and  great.  Expressly  denying  from 
the  very  start  all  hostility  to  workingmen's  insurance  in  the 
abstract,  they  show  how  gravely  German  industry  is  handicapped 
in  competition  with  foreign  markets  by  the  cost  of  insurance, 
which  can  now  be  characterized  by  nothing  short  of  monstrous, 
amounting,  as  it  does,  to  almost  exactly  2,000,000  marks  daily; 
it  is  this  insurance  that  they  make  primarily  responsible  for  the 
great  rise  in  prices  which  bears  so  heavily  on  all  strata  of  society ; 
and  finally  they  point  to  the  extreme  difficulty,  if  not  impossi- 
bility, of  recovering  these  funds,  although  this  would  be  abso- 
lutely necessary  should  Germany  become  involved  in  economic 
calamity,  financial  panic,  or  unfortunate  war. 

Excluding  from  the  mass  of  accessible  expressions  of  opinion 
on  this  subject  those  of  the  Trades  Associations  themselves, 
since  they  would  naturally  be  exposed  to  the  charge — so  much 
in  vogue  to-day — of  lack  of  impartiality,  we  cite  only  the  reports 
of  certain  chambers  of  trade  and  commerce  for  the  last  year. 
Liibeck  complains  that  the  workingmen  alone  receive  support 
in  the  Reichstag,  to  the  utter  disadvantage  of  the  employers; 

19 


and  adds  that  there  should  be  some  end  of  rivalry  for  the  favor 
of  the  workingmen  from  mere  motives  of  partizan  politics.  Elber- 
feld  writes:  "The  steady  advance  in  the  price  of  production, 
due  to  the  increase  of  wages,  salaries,  and  other  expenses,  the 
augmented  taxes,  and — last,  but  by  no  means  least — the  financial 
burdens  of  a  social  policy  which  limits  industrial  freedom  seri- 
ously endanger  the  exportability  of  the  products  of  many  branches 
of  industry,  this  being  especially  true  of  the  textile  industry, 
whose  foreign  competitors  pay  lower  wages  and  have  no  social 
burdens,  or,  at  most,  merely  minor  ones.  We  must,  therefore, 
earnestly  and  emphatically  repeat  the  warning  against  an  exces- 
sive tension  of  the  burdens  of  social  policy."  Finally,  Essen 
declares:  "If,  disregarding  the  burdens  of  taxation,  we  con- 
sider simply  the  burdening  of  our  industrial  activity  with  social 
assessments,  we  reach  the  result  that  even  to-day  the  burden  of 
contributions  to  insurance,  caused  by  this  social  policy,  alone 
amounts  to  nearly  800,000,000  marks  annually.  It  is  self-evident 
that  such  enormous  assessments,  especially  after  crises  and  in 
periods  of  depression,  can  only  constitute  a  formidable  obstacle  to 
the  recovery  of  our  economic  life.  It  is  equally  obvious  that  this 
obstacle  will  in  future  become  increasingly  powerful  when  com- 
bined with  the  steady  augmentation  of  burdens  that  may  cer- 
tainly be  foreseen.  Nevertheless,  the  surplus  expenses  which 
the  new  Government  Insurance  Regulation  will  create  amount, 
according  to  one  estimate,  to  127,000,000  marks,  and  according 
to  other  estimates  to  300,000,000  marks  annually,  while  the  pen- 
sion insurance  of  private  officials  will  involve  an  additional  burden 
of  some  hundreds  of  millions  of  marks  annually.  We  must, 
therefore,  soon  reckon  with  a  burden  of  about  1,250,000,000 
marks  each  year,  laid  upon  our  industrial  activity  simply  and 
solely  for  purposes  of  social  insurance.  We  are  far  from  oppos- 
ing either  the  legislation  or  the  development  of  our  social  insur- 
ance, but,  in  view  of  the  alarmingly  rapid  rise  of  all  these 
assessments,  we  must  emphatically  admonish  the  reader  of  the 
fact  that,  once  these  burdens  are  assumed,  they  must  be  perma- 
nently borne,  whether  our  foreign  competitors  follow  us  or  not; 
and  they  must  be  borne  in  times  of  economic  depression  no  less 
than  in  those  of  economic  prosperity.  And  should  there  come 
times  when  our  industrial  activity — or  even  merely  essential  parts 
of  it — should  no  longer  be  able  to  meet  the  social  obligations 
legally  imposed  upon  it,  then  there  will  be  no  alternative  except 
for  the  State  as  the  State  to  assume  those  burdens  if  it  is  to  avoid 

20 


a  catastrophe  whose  scope  none  can  foresee,  even  so  far  as 
social  conditions  will  be  concerned." 

The  report  of  the  Imperial  Insurance  Office  meets  these  objec- 
tions, which  it  recognizes  as  having  a  very  real  foundation,  by 
remarking  that,  despite  its  heavy  burdens,  German  industry  has 
shared  in  the  forward  trend  of  the  development  of  political 
economy;  it  enumerates  the  theoretical  advantages  for  the  em- 
ployer in  an  organization  of  Trades  Associations;  and  it  calls 
attention  to  the  fact  that  accident  insurance  frees  the  employers 
from  claims  for  damages  and  from  suits  for  liability.  And  yet, 
as  the  Office  itself  is  forced  to  admit,  at  least  this  last  advantage 
loses  much  of  its  importance  when  it  is  remembered  that,  in 
addition  to  his  insurance,  the  individual  employer  is  still  liable 
to  a  very  considerable  degree  and  one  that  transcends,  in  con- 
sequence of  certain  decisions  of  the  civil  courts,  what  the  legisla- 
tor apparently  foresaw  and  intended.  It  is,  from  every  point  of 
view,  a  deplorable,  though  undeniable,  fact  that — with  the  natural 
exception  of  official  laudations,  which  are  of  scant  value — there 
is  nowhere  a  trace  of  the  enthusiasm  which  once  greeted  the 
new  institution.  Everyone  who  can  possibly  do  so  endeavors  to 
escape  from  the  burdens  of  insurance,  and  this  naturally  and 
rightly  results  in  counter-measures  on  the  part  of  the  corpora- 
tions that  carry  the  insurance,  since  they  must  and  will  secure 
what  is  due  them.  Controlling  officials  of  the  various  associa- 
tions constantly  traverse  the  country,  themselves  controlled  in 
turn  by  the  Imperial  Insurance  Office  and  the  State  governments, 
so  that  frequently  one  official  objects  to  the  measures  required 
by  another,  while  the  employer  is  at  a  loss  to  know  whom  to 
obey,  and  unpleasantness  is  rife.  An  endless  mass  of  writing 
becomes  requisite  to  track  down  and  apprehend  those  who  shirk 
their  obligations ;  penalties  are  imposed  to  compel  the  delinquents 
to  perform  their  legal  duties ;  and  "the  combination  of  the  material 
forces  of  the  life  of  the  people"  has  become  one  which  is  abso- 
lutely forced.  The  figures  are  eloquent :  in  1908,  the  last  year  for 
which  statistics  are  available,  the  fines  collected  by  the  insurance 
companies  amounted  to  268,177.11  marks,  and  those  by  the  Trades 
Associations  to  412,608.51  marks. 

Despite  all  these  compulsory  measures,  the  economic  position 
of  the  insurance  carriers  is  by  no  means  as  secure  as  might  be 
wished.  Though  the  Trades  Associations  have  now  been  estab- 
lished for  twenty-five  years,  their  status  is  peculiarly  liable  to 
great  variation,  even  if  the  Imperial  Insurance  Office  sanctions 

21 


change  only  for  cogent  reasons.  At  one  time  large  groups  of  in- 
dustries will  petition  to  be  transferred  from  one  Trades  Associa- 
tion to  another  where,  they  hope,  their  taxation  will  be  less ;  and 
at  another  time  an  employer  will  make  the  same  request  for  him- 
self individually,  or  will  even  seek  to  be  exempt  altogether.  The 
insurance  obligations  of  individual  industries  and  of  entire  lines 
of  industry  thus  become  as  problematical  as  their  precise  relation- 
ship to  the  Trades  Associations ;  and  the  positions  of  main  indus- 
try and  subsidiary  industry  are  interchanged.  This  entails  great 
labor  and  expense,  not  only  on  the  Imperial  Insurance  Office,  but 
also  on  the  insurance  carriers  themselves;  such  being  especially 
the  case  when  an  industry  burdened  by  an  accident  is  concerned, 
or  when  lines  of  industry  peculiarly  liable  to  accidents  are 
involved,  since  each  Trades  Association  is  naturally  unwilling  to 
accept  such  industries,  and  one  passes  them  on  to  the  other.  These 
controversies  affect  the  Government  authorities,  the  chief  victim 
being  the  jack-of-all-trades  of  Prussian  administration,  the 
district  president,  who  is  often  asked  questions,  in  the  hope  of 
reaching  a  decision  that  shall  be  as  unbiased  as  possible,  which 
the  employer  himself  could  not  answer.  Only  he  who  has  taken 
part  in  these  controversies — or,  rather,  battles — can  form  any 
conception  of  their  embittering  and  costly  nature.  It  thus  be- 
comes readily  intelligible  why  those  Trades  Associations  and 
insurance  institutions  which  carry  on  their  work  among  an  agri- 
cultural population  are  the  very  ones  that  repeatedly  come  peril- 
ously close  to  bankruptcy,  so  that  the  officials  of  the  organizations 
concerned,  and  of  the  Ministry  of  the  Interior  and  the  Imperial 
Insurance  Office,  are  compelled  to  make  tours  that  may  require 
months,  in  order  to  gain  at  least  some  measure  of  relief. 

Activity  in  the  Trades  Associations  has  gradually  become  both 
unpleasant  and  unpopular,  as  is  clear  from  the  fact  that  there  is 
a  steady  dwindling  in  the  forces  which  at  first  were  placed  at  the 
service  of  those  Associations,  and  which  included  names  of  high 
reputation,  experienced  students  of  social  politics,  and  political 
economists.  Since  the  managers  of  the  Associations  were  re- 
quired to  be  chosen  from  the  ranks  of  employers  still  engaged  in 
active  business,-  and  not  from  those  who  had  retired  to  private 
life,  and  since  the  law  forbade  the  managers  to  receive  any  salary, 
allowing  them  merely  compensation  for  loss  of  time,  the  Asso- 
ciations sought  to  retain  their  services  by  giving  them  such  com- 
pensation in  generous  measure.  Thereupon  the  Social  Demo- 
cratic press  raised  its  customary  outcry  "in  the  name  of  the 

22 


workingmen" — who,  in  reality,  had  no  concern  in  the  matter, 
since  they  contributed  nothing  toward  accident  insurance — that 
this  compensation  was  a  violation  of  the  law.  Although  this 
assertion  was  false,  the  boards  of  control  were  so  weak  as  to 
interfere  with  the  legitimate  rights  of  the  Associations  and  to 
curtail  the  compensation  for  loss  of  time  as  far  as  they  possibly 
could,  even  though  they  were  given  proof  that  the  managers  in 
question,  in  their  devotion  to  the  interests  of  the  Associations, 
were  suffering  losses  that  could  scarcely  be  reckoned  in  marks 
and  pfennigs.  The  natural  consequences  are  a  constantly  increas- 
ing difficulty  of  securing  the  proper  persons  for  these  important 
positions,  a  limited  degree  of  devotion  to  the  interests  of  the 
Associations  on  the  part  of  those  who  have  actually  been  secured, 
and  a  resultant  and  steadily  accelerated  transfer  of  the  control  of 
the  Associations  into  the  hands  of  paid  officials,  business  mana- 
gers, administrative  directors,  and  similar  officers  of  various 
designation.  However  excellent  the  work  of  these  gentlemen 
may  be — and  excellent  it  is  indeed — none  the  less,  there  is  no 
longer  any  "combination  of  the  material  forces  of  the  life  of  the 
people,"  which  was,  of  course,  intended  to  be  self-administrative. 
Incidentally  it  may  be  noted  that  this  system  is  by  no  means  less 
expensive,  for  the  cost  of  administration  has  risen  from  34 
pfennigs  per  insured  in  1888  to  53  pfennigs  in  1908. 

Hand  in  hand  with  the  growth  of  bureaucracy  the  Trades  As- 
sociations tend  more  and  more  to  become  regular  organizations 
of  officials,  especially  as  the  officers  of  the  middle  and  lower  rank 
demand  permanent  positions  and  pension  privileges,  these  de- 
mands being  entirely  justifiable  from  their  point  of  view.  In  the 
case  of  agricultural  Trades  Associations — at  least  in  Prussia — 
bureaucratic  administration  is  implied  from  the  very  first  in  virtue 
of  their  connection  with  the  State,  municipal,  and  provincial  au- 
thorities. Since  these  authorities  normally  control  invalid  insur- 
ance, two  officials,  occupying  the  same  position  and  charged  with 
the  duty  of  deciding  a  given  case,  may  go  to  law  with  each  other 
in  the  name  of  the  two  insurance  carriers  which  they  control  when 
one  of  them  desires  to  shift  a  pension  claim  from  himself  to  his 
colleague.  This  is  a  result  of  bureaucracy  which  many  will  fail 
to  deem  as  serious  as  it  really  is.  In  the  very  nature  of  the  case 
the  element  of  autonomous  administration  recedes  far  into  the 
background  where  invalid  insurance  is  concerned,  although  the 
more  recent  wording  of  the  law  has  sought  to  save  this  principle 
to  some  extent  by  the  creation  of  an  intermediary  in  the  form 

23 


of  a  Pension  Office.  Nevertheless,  the  enormous  mass  of  work 
to  be  performed  apparently  renders  impossible  any  realization  of 
the  basal  concept  of  autonomy,  for  the  sessions  of  the  committees 
appointed  for  this  purpose  are  utterly  unable  to  give  thorough 
consideration  to  the  ever-increasing  host  of  applications.  The 
paid  officials  perform  the  chief  task  of  preparation,  and  their 
influence  on  the  final  decision  is  thus  self-evident. 

It  is  beyond  all  question  that  autonomy  has  been  most  per- 
fectly secured — at  least  superficially — in  the  case  of  the  sick 
funds,  yet  the  result  has  been  scarcely  a  happy  one;  it  has  at 
least  failed  to  realize  the  concept  and  wish  of  the  legislator.  It 
is  well  known  that  the  Social  Democrats  have  found  a  way  to 
put  the  sick  funds  under  their  complete  control  by  means  of 
distribution  of  votes  in  the  committees ;  and  the  qualification  for 
the  office  of  president,  treasurer,  comptroller,  and  other  vacancies 
is  not  merit,  but  political  affiliation — all  these  offices  are  reserved 
to  be  the  perquisites  of  trusty  fellow-partizans.  The  phenome- 
non is  identical  with  that  presented  by  the  official  positions  in  the 
miners'  unions,  which  have  recently  extorted  public  protest  from 
so  reserved  a  man  as  Dr.  Sydow,  the  German  Minister  of  Com- 
merce. By  a  vicious  circle,  which  will  be  still  more  frequently 
evident  in  the  future,  this  firm  foundation  serves  as  the  basis  for 
an  agitation  that  is,  for  this  very  reason,  all  the  more  powerful, 
so  that  the  institution  which  was  designed  to  cut  the  ground  from 
under  the  revolutionary  party  is  now  made  to  promote  it.  The 
writings  of  St.  Neumann  (Die  Sozialdemokratie  als  Arbeitgeberin 
und  Unternehmerin)  and  of  M.  Lohan  (Die  sozialdemokratische 
Gefahr),  and  especially  Moller's  recent  Herrschaft  der  Sozialde- 
mokratie in  der  deutschen  Krankenver sicker  ung,  supply  an  over- 
whelming mass  of  details  to  which  the  press  adds  new  instances 
almost  daily.  And  it  should  also  be  noted  that  complaints  of  the 
diversion  of  sick  funds  to  purposes  hostile  to  the  State  are  now 
commencing  to  come  from  those  parts  of  Germany  that  have  a 
Polish-speaking  population. 

The  real  value,  in  many  instances,  of  State  or  Imperial  super- 
vision of  the  autonomy  of  the  Trades  Associations  may  be  seen 
in  yet  another  respect,  which  is  at  the  same  time  a  proof  of  the 
statement  already  made,  that  the  generosity  of  the  insurance 
companies  is  excessive.  As  in  the  former  case,  it  was  a  wise, 
beneficent,  and  thoroughly  commendable  measure  for  Trades 
Associations  and  institutions  to  build  hospitals  and  sanitariums 
for  those  whom  they  insured,  that  prevention  and  cure  might 

24 


there  be  effected  with  the  greater  speed,  perfection,  and  per- 
manency. But  it  was  neither  commendable  nor  in  accord  with 
the  duties  of  a  good  parent  and  careful  guardian  that  these 
measures  should  be  carried  out  with  an  expenditure  that  can 
properly  be  characterized  only  as  wasteful,  and  that  was  fore- 
doomed to  create  false  ideas  of  the  enormous  wealth  of  the  insur- 
ance companies,  besides  exaggerating  all  claims  upon  them  both 
in  kind  and  in  degree.  No  one  can  object  in  the  least  to  the  fact 
that  these  hospitals  were  equipped  in  the  most  appropriate  and 
practical  manner,  and  that,  without  regard  to  expense,  the  most 
modern  achievements  of  skill,  architecture,  industry,  and  medical 
science  were  installed ;  nor  can  any  one  cavil  at  the  lavishing  of 
the  most  whole-hearted  care  for  the  welfare  of  the  inmates.  And 
yet  there  is  no  more  need  for  such  buildings  to  be  homes  of  luxury 
than  there  is  for  the  business  offices  of  the  insurance  carriers  to 
be  palaces.  Nor  was  this  all.  The  inmates  of  many  of  these 
institutions  enjoyed  food  and  drink,  shelter  and  chance  for  slum- 
ber, entertainment  and  recreation  such  as  they  had  never  dreamed 
of  before,  so  that  many  and  many  a  one  learned  to  prefer  his 
sojourn  in  the  hospital  to  his  own  home,  and,  when  he  had 
returned  to  his  family,  was  no  longer  content,  but  yearned  for 
the  flesh  pots  of  Egypt,  for  the  comforts  which,  too  brief  for  his 
desires,  were  yet  long  enough  to  fill  him  with  envy  and  hatred  for 
those  who,  as  he  fancied,  always  fared  so  well.  "Less  would 
here  again  be  more."  One  example  out  of  many  will  be  sufficient. 
Such  a  sanitarium  which,  it  was  estimated,  could  be  built  for 
500,000  marks,  finally  cost  2,700,000,  but  it  included  a  hall  which, 
in  the  architect's  proud  claim,  was  a  modern  imitation  and  adapta- 
tion of  the  Baths  of  Caracalla,  to  say  nothing  of  a  bowling-alley 
which  alone  required  an  expenditure  of  18,000  marks,  while  the 
patients  were  to  be  entertained  by  four  orchestrions,  at  12,000 
marks  each. 

But  what  do  the  boards  of  control  do  in  such  cases?  It  is  a 
magnificent  testimonial  to  our  official  spirit,  faithful  to  time- 
honored  Prussian  tradition,  that  the  trend  toward  luxury  and 
extravagance,  which  forms  so  repellent  and  dangerous  a  charac- 
teristic of  the  materialistic  tendencies  of  our  time,  has  found, 
relatively  speaking,  less  entrance  here  than  in  any  other  class. 
Here  the  mad  craze  for  external  show  is  not  yet  the  dominating 
factor ;  and  economy  is  observed  even  in  the  case  of  money  which 
is  not  one's  own,  which  belongs,  in  other  words,  to  the  State. 
For  these  reasons  the  plans  of  the  insurance  institutions  at  first 

25 


aroused  special  consternation  in  the  Imperial  Insurance  Office, 
for  the  Trades  Associations  are  far  more  conservative  in  this 
regard,  since  their  members  share  immediately  in  their  operations. 
Efforts  were  made  to  simplify  the  institutions  and  to  maintain 
less  expensive  establishments,  not  only  for  their  own  offices,  but 
also  for  their  sick  and  convalescent;  and  neither  ink  nor  paper 
was  spared  in  the  cause  of  reform.  But  it  was  all  in  vain.  Those 
who  are  familiar  with  our  official  organism  know  that  the  lower 
court  is  not  over-fond  of  amendment  by  the  upper,  especially 
when  the  case  is  one  of  alleged  self-government.  So  many 
plausible  reasons  could  readily  be  brought  forward  to  justify  this 
luxury :  insurance  would  gain  regard  and  popularity ;  the  insured 
would  measure  the  good  will  of  their  compatriots  and  the  protec- 
tion of  the  State  in  proportion  to  the  sums  expended  for  them, 
etc.,  etc.,  in  a  strain  known  only  too  well.  What  was  the  Im- 
perial Insurance  Office  to  do  ?  Was  it  to  proceed  to  inflict  twenty- 
mark  fines  on  the  executive  committees?  And  suppose  it  did 
carry  its  plans  into  effect?  In  any  event  the  Office  would  have 
been  opposed  by  public  opinion,  whose  generosity,  as  will  be 
shown  below,  is  exceeded  only  by  its  ignorance.  Accordingly, 
the  Office  was  silent,  for  its  right  of  supervision  had  proved  to 
be  like  the  famous  knife  that  had  no  blade  and  was  minus  a 
handle.  Before  long  all  the  authorities  were  in  the  same  boat, 
hailing  with  full  official  paraphernalia  that  happy  day  when  hun- 
dreds of  thousands,  that  might  have  been  employed  to  advantage, 
were  squandered  in  empty  show  to  the  detriment  of  the  nation 
and  the  breeding  of  discontent. 

If  the  insurance  carriers  must  be  charged  with  having  failed, 
to  a  greater  or  a  lesser  degree,  to  observe  that  conservatism  which 
both  private  and  public  considerations  dictated  with  regard  to 
those  whom  they  insured,  this  indictment  holds  in  far  severer 
measure  against  the  State  organs  of  insurance.  In  this  respect 
the  Imperial  Insurance  Office  has  been  particularly  guilty  of 
having  entered  upon  a  course  that  is  apparently  beset  with  the 
gravest  perils.  It  must  be  clearly  borne  in  mind  that  the  efforts 
of  this  board  were,  as  has  already  been  said,  necessarily  devoted 
to  gaining  the  confidence  of  the  people,  and  especially  of  the  so- 
called  working  classes,  who  had  even  then  been  superabundantly 
filled  with  discontent  and  false  teachings,  to  making  the  new  crea- 
tion of  value  to  them,  and  to  accustoming  them  to  a  mode  of  treat- 
ment so  entirely  different  from  the  rigidly  legal  point  of  view. 
This  was  no  easy  task.  The  first  president  of  the  Office  was  fond 

26 


of  terming  the  insured  as  children,  often  ill-bred  and  stubborn 
children,  who  could  best  be  won  by  kindness.  It  may  well  be 
questioned  whether  this  comparison  rightly  appraised  the  class 
consciousness  of  the  workingmen  of  to-day,  and  whether  it  was  in 
harmony  with  the  extensive  rights  which  they  enjoy  in  the  State 
by  virtue  of  modern  legislation  or  with  their  still  more  sweeping 
demands.  It  may  even  be  queried  whether,  from  the  point  of 
view  of  mere  logic,  a  human  being  may  be  treated  as  a  child  in 
one  respect,  while  in  another  respect  he  is  very  decidedly  con- 
sidered an  adult.  But  the  comparison  was  an  anachronism  from 
each  and  every  point  of  view.  It  was  an  inheritance  from  the 
despotism  of  eighteenth  century  rationalism,  though  this  benevo- 
lent despotism  had  not  only  cake  ready  for  its  children  subjects, 
but  also,  like  every  wise  teacher,  a  good  stout  rod.  Yet  this 
principle,  had  it  been  intelligently  applied,  might  have  accom- 
plished much ;  it  might  have  been  of  advantage  for  all  concerned, 
especially  in  the  initial  stages,  and  particularly  in  the  administra- 
tive division  in  drawing  up  "petitions  for  workingmen's  aid." 
As  a  matter  of  fact  the  workingmen  very  speedily  became  ac- 
customed to  present  their  grievances,  doubts,  and  claims  of  any 
sort  whatever  to  the  Imperial  Insurance  Office,  frequently  without 
making  claim  "on  any  class  of  intermediate  court.  The  number 
of  these  petitions  rose  from  304  in  1887  to  3,303  in  1909.  With 
infinite  patience,  and  with  an  expenditure  of  time,  devotion,  and 
energy  that  was  often  out  of  all  proportion  to  the  subject-matter 
of  the  petitions,  every  effort  was  made  to  do  justice  to  the  peti- 
tioners, their  cause  was  pleaded  before  every  possible  court,  ample 
instruction  was  given  them,  and,  to  use  a  favorite  expression  of 
the  Office,  a  strong  right  arm  was  lent  to  those  who  were  insured. 
But  even  the  Imperial  Insurance  Office  is  not  omnipotent,  and 
there  are  impossibilities  even  in  workingmen's  insurance.  Never- 
theless, the  children,  spoiled  as  they  have  been,  now  become 
stubborn  and  ill-bred;  and  many  petitions  are  filled  with  insults 
and  threats  to  appeal  to  the  Emperor,  to  Bebel,  and  to  the  Social 
Democratic  Vorwarts;  while  letters  are  written  incessantly,  even 
though  the  Office  may  repeatedly  explain  that  it  can  do  nothing 
further  for  the  petitioner. 

In  this  way  an  absolutely  enormous  mass  of  writing  has  been 
multiplied,  and  two  details  have  had  an  especially  injurious  effect. 
One  is  the  habit  of  continually  giving  the  petitioner  specific  in- 
struction as  to  his  legal  rights,  though  the  precise  form  chosen 
is  usually  an  unhappy  one.  He  is  informed  that  he  must  await 

27 


the  decision  of  the  Trades  Association.  "Should  you  be  dissatis- 
fied with  this  decision,  you  have  the  right  of  appeal.  In  case 
you  fail  to  be  satisfied  with  the  verdict  then  rendered,  you  next 
have  the  right  of  recourse  to  the  Imperial  Insurance  Office."  This 
instruction  is  entirely  superfluous,  for  the  law  expressly  requires 
the  decision  of  the  Trades  Association  to  designate  the  petitioner's 
legal  rights  with  all  requisite  minuteness;  and  even  a  "child" 
like  the  workingman  must  know,  now  that  workingmen's  insur- 
ance has  been  in  force  for  almost  a  generation,  that  the  Imperial 
Insurance  Office  is  the  final  court  in  ninety-nine  out  of  a  hundred 
cases.  Since  the  petitioner  is,  naturally  enough,  "satisfied"  with 
a  decision  or  verdict  only  when  it  gives  him  all  that  he  demands, 
he  now  considers  himself  practically  bound  to  make  use  of  his  legal 
rights ;  and  his  composition  not  infrequently  begins  with  the  phrase, 
"At  the  direction  of  the  Imperial  Insurance  Office  I  appeal"  (or, 
"take  recourse").  In  this  way  there  is  a  purely  artificial  multi- 
plication of  legal  rights,  and  it  becomes  readily  explicable  that  in 
1909,  out  of  422,076  decisions  of  the  Trades  Associations,  76,352, 
or  18.9%,  were  opposed  by  appeals,  and  out  of  some  100,000 
verdicts  by  courts  of  arbitration,  22,794,  or  24.74%,  were  met  by 
recourse.  The  proportions  are  not  much  better  in  the  institutions 
for  invalid  and  old-age  insurance,  although  here,  in  the  great 
majority  of  cases,  the  data  contained  in  the  vouchers  are  of  them- 
selves sufficient  to  decide  the  fate  of  an  appeal.  The  decisions 
in  these  classes  of  insurance  numbered  386,737,  the  appeals  28,831, 
and  the  revisions  of  decision  6,161.  All  these  figures  have  a 
tendency  to  rise — this  tendency  being  strongly  marked  in  the  case 
of  accident  insurance — and  they  are  amply  sufficient,  without 
taking  other  evidence  into  account,  to  warrant  passing  verdict 
on  our  insurance,  which  was  called  into  existence  to  avoid  contro- 
versies concerning  damages  for  liability. 

The  second  detail  which  has  laid  an  insufferable  burden  upon 
both  the  insurance  carriers  and  the  entire  institution  has  its  origin 
in  a  publication  of  the  Imperial  Insurance  Office  which  states  that 
it  permits  the  Trades  Associations — that  it  is,  in  other  words, 
not  irreconcilable  with  the  obligations  of  a  guardian  and  parent 
— to  submit  to  a  second  examination  a  claim  whose  legal  validity 
has  already  been  denied,  and  to  pass  a  new  decision,  such  a  de- 
cision, even  though  again  adverse,  rendering  it  possible  for  the 
insured  once  more  to  try  his  fortunes  by  means  of  the  courts. 
This  eliminated  for  (or,  more  accurately,  to  the  prejudice  of) 
the  Trades  Associations  the  legal  power  which,  in  all  other  re- 

28 


spects,  was  generally  recognized  as  one  of  the  most  important 
defences  of  legal  security.  There  was  no  possibility  of  taking 
from  the  insured  a  pension  which  had  been  unjustly  granted  him, 
even  though  such  grant  should  prove  to  have  been  based  on  error. 
On  the  other  hand,  the  permission  of  re-examination  accorded  to 
the  Trades  Associations  has  developed,  in  course  of  time,  into 
obligation,  for  the  heavy  hand  of  the  Imperial  Insurance  Office 
presses  upon  them  until  they  yield  and  render  a  decision,  where- 
upon the  pension  struggle  begins  anew.  This  course  of  procedure 
might  be  accepted  with  favor  if  it  was  followed  only  in  peculiar 
and  exceptional  instances ;  but  it  has  become  far  too  general  be- 
cause of  the  efforts  of  the  Office  to  "help,"  and  because  of  in- 
sufficient power  of  resistance  on  the  part  of  the  insurance  carriers, 
who  are  unwilling  to  incur  the  disfavor  of  their  supervising 
court — especially  when  they  intend  ultimately  to  win  their  point 
as  regards  the  baseless  claim — and  who  fear  the  charge  of  lack- 
ing friendship  for  the  workingmen  more  than  the  complaints 
of  their  overburdened  colleagues.  Here  again  there  is  total  for- 
getfulness  of  the  great  general  principle  that  bitterness  engen- 
dered by  pension  controversies  was  precisely  what  the  legislator 
feared,  and  that  he  sought  by  every  possible  means  to  exclude 
such  controversies. 

The  real  administration  of  justice  is  still  more  suspiciously 
affected  by  the  attitude  which  thrusts  into  the  background  the 
legal  character  of  protection  and  brings  into  the  foreground  the 
desire  to  help.  It  is  beyond  all  question,  even  though  there  was 
no  explicit  legal  declaration  on  the  subject,  that  the  Imperial 
Insurance  Office  was  intended  from  the  very  first  to  be  a  court 
of  justice  with  full  judicial  independence,  and  the  legislator  gave 
this  court  of  justice  a  legal  equipment  that  was  possessed  by 
scarcely  any  other  court  of  its  class.  Its  president  was  to  be  its 
presiding  judge;  a  member  of  the  Office  was  to  report  its  pro- 
ceedings ;  the  Federal  Council  was  to  delegate  one  of  its  members 
to  guard  the  great  interests  of  the  Empire;  two  judges  were  to 
maintain  the  court's  connection  with  the  jurisdiction  of  the  civil 
law;  and  an  employer  and  an  employee  were  to  represent  their 
colleagues.  This  was,  of  course,  feasible  only  when  the  judicial 
rulings  of  the  Office  were  but  seldom  required.  Nevertheless, 
the  pompous  and  unwieldy  machinery  remained  unchanged  even 
when  the  suits  for  pensions  became  more  and  more  frequent,  and 
when  the  Imperial  Insurance  Office  was  forced  to  become  the 
favorite  arena  for  litigitis  and  pension  hysteria.  The  president 

29 


has  practically  ceased  long  since  to  be  the  presiding  judge,  and 
even  the  directors  have  far  too  many  other  claims  upon  their 
time;  the  role  of  presiding  officer  falls  to  the  older  members, 
whom  the  Emperor  nominates  to  this  especial  position,  and  who, 
with  significant  contempt  for  their  scope  of  activity,  are  denied 
the  title  of  president  which  is  customary  in  such  cases.  The 
Federal  Council  is  almost  invariably  represented  by  members  of 
the  Office,  and  the  judges  complain  of  the  overwhelming  burden 
of  reports  and  verdicts  which  they  must  assume.  The  labor  that 
is  both  required  and  performed  is  enormous ;  during  1909  cases 
of  accident  insurance  alone  demanded  1,297  sessions.  And  yet 
the  Imperial  Insurance  Office  complains  that,  "Despite  this  in- 
creased activity,  which  is  possible  only  by  straining  every  nerve, 
the  Imperial  Insurance  Office  has  not  succeeded  in  so  mastering 
the  tremendous  increase  of  recourse  cases  as  even  approximately 
to  pass  final  decision  on  such  cases  with  that  rapidity  which  is 
both  requisite  for  the  insured  and  intended  by  the  legislator.  On 
the  contrary,  a  state  of  affairs  has  here  developed  which  grows 
worse  from  year  to  year,  and  which  in  recent  years  has  become 
utterly  unbearable."  No  criticism,  however  hostile  it  may  be, 
passes  sterner  condemnation  on  our  insurance  than  this  truly 
piteous  lament. 

In  the  majority  of  these  sessions  there  is  absolutely  no  ruling 
on  questions  of  law.  The  seven  men,  selected  representatives  of 
their  various  colleagues,  decide  whether,  for  example,  a  man  who 
has  been  injured  shall  receive  a  partial  pension  of  10%  for  a 
crooked  finger,  or  whether  nothing  is  due  him.  The  great  ma- 
jority of  cases  decided  by  the  Imperial  Insurance  Office  are 
wretched  wranglings  as  to  how  far  a  man  who  has  been  injured 
has  lost  his  earning  capacity  in  consequence  of  his  accident;  yet 
cases  of  this  type  formed  no  less  than  77.7%  of  the  total  number 
of  recourse  actions  in  1909.  The  great  increase  in  claims  for 
trivial  injuries  is  shown  by  the  fact  that  between  1888  and  1908 
the  average  amount  paid  for  each  accident  indemnified  sank  from 
232.19  to  155.53  marks,  although  the  total  cost  of  indemnity  rose 
from  5,900,000  to  155,100,000  marks  during  the  same  period. 
In  the  case  of  invalid  insurance  somewhat  decisive  measures  soon 
became  necessary.  Here  retrial  is  the  last  legal  resort,  and  the 
court  is  usually  composed  of  only  five  persons.  This  state  of 
affairs  has  long  been  universally  recognized  as  intolerable,  and 
the  Imperial  Insurance  Office  itself  sees  its  only  hope  in  a  "not 
too  narrow  limitation  of  its  competency  for  final  decision  in  con- 

30 


troversies  regarding  claims  for  damages,  especially  in  the  domain 
of  accident  insurance."  The  reason  why  no  remedy  has  yet  been 
found  is  probably  not  regard  for  the  wishes  of  the  Trades  Associa- 
tions, which,  for  reasons  to  be  considered  later  (page  44),  prefer 
recourse  to  retrial,  but  the  difficulty  of  framing  regulations  which 
will  meet  the  problems  involved.  Yet  the  law  is  practically  in- 
consistent when  there  is  competency  of  decision  where  the  Empire 
shares  in  the  burden,  but  not  where  the  Trades  Associations  carry 
the  pension  load.  Nevertheless,  the  Empire  suffers  even  under 
such  conditions,  since  it  pays  the  expenses  of  maintaining  the 
court,  while  the  number  of  positions  in  the  Imperial  Insurance 
Office  has  increased  to  a  degree  that  can  be  termed  nothing  short 
of  unnatural,  in  proportion  to  the  steady  growth  of  the  tasks 
that  it  must  perform.  In  the  fiscal  year  1909-10  there  were, 
in  addition  to  the  president  and  the  two  directors,  sixty-three 
standing  members,  besides  ten  assistants,  while  the  number  of 
associate  justices  had  risen  from  four  to  ninety-nine. 

The  conviction  that  jurisdiction  must  also  help  those  who  have 
been  insured  has  laid  another  and  a  very  considerable  burden 
upon  the  Empire  because  of  the  voluminous  testimony  which  is 
taken  in  the  last  court — that  of  recourse — this  being  done  in  great 
part,  through  a  sort  of  agreement  between  the  presiding  judge 
and  the  official  who  reports  the  proceedings,  before  the  case  is 
debated  in  open  court.  Just  as  the  administrative  division  ex- 
amines the  petitions  for  workingmen's  aid,  the  senates  scrutinize 
from  every  point  of  view  the  petitions  that  come  before  them, 
in  the  hope  that  some  further  concession  may  be  made  the  per- 
sons insured.  Nor  is  this  scrutiny  restricted  to  the  claims  and 
demands  of  the  appellant,  for  if  he  considers  himself  aggrieved  in 
the  degree  of  his  loss  of  earning  capacity  as  assumed  by  the  lower 
court,  he  may,  under  certain  circumstances,  exaggerate  the 
amount  of  his  yearly  wages  which  serves  as  a  basis  for  calculat- 
ing his  pension ;  and  the  Office  has  repeatedly  declared  that  a 
petitioner's  dissatisfaction,  in  any  respect  whatsoever,  with  the 
preliminary  judgment  rendered  him  secures  for  his  petition  the 
consideration  due  to  any  legal  means  of  redress.  Documents  are 
searched — or  at  least  should  be — with  the  utmost  meticulosity, 
on  the  chance  that  some  point  may  still  bear  "interpretation"  in 
favor  of  the  insured ;  expert  opinion  is  heaped  on  expert  opinion, 
often  with  the  additional  requirement  of  tedious  hospital  observa- 
tion of  the  person  alleging  injury,  especially  in  case  of  one  of  the 
many  neuroses  which  it  is  so  much  the  fashion  to  claim  to  be  the 

31 


results  of  accident.  The  foremost  medical  authorities  must  then 
be  consulted,  and  they  prepare  learned  treatises  which,  in  very 
many  cases,  amount  simply  to  making  the  decision  dependent  on 
the  value  placed  upon  the  evidence  offered,  this  being  dutifully 
left  to  the  judge.  All  this  is  naturally  very  expensive,  and, 
although  every  president  of  the  Office  has  had  thus  far  to  limit  the 
taking  of  evidence,  practically  the  only  result  has  been  to  provoke 
charges  from  many  quarters  that  the  independence  of  the  judges 
was  being  attacked.  A  few  of  last  year's  figures  will  suffice  to 
prove  the  truth  of  these  statements.  Out  of  4,509  cases  evidence 
was  taken  before  trial  in  3,370,  and  on  the  basis  of  a  formal 
resolution  of  the  senate  in  1,139,  while  expert  medical  opinions 
were  sought  in  2,014.  Of  the  2,500,000  marks  expended  for  the 
Imperial  Insurance  Office  in  1910,  the  Imperial  budget  provided 
95,000  marks  simply  for  the  taking  of  evidence. 

Even  the  senates  of  invalid  insurance  are  not  exempt  from  this 
mania  for  instruction.  Instead  of  thanking  their  creator  for 
wishing  to  save  them  from  repellent  association  with  petty  de- 
tails of  actual  data,  so  utterly  unworthy  of  the  dignity  of  a  court 
of  last  resort,  they  availed  themselves  of  the  provision  that  a 
decision  is  liable  to  retrial  if  it  contradicts  the  "evident  contents 
of  the  records"  to  make  excessively  minute  investigations,  on  the 
chance  that  they  might  find  here  and  there  in  the  records  some 
assertion — however  unimportant  it  might  be — which,  when  duly 
proved  and  properly  applied,  might  be  sufficient  to  cause  a  differ- 
ent verdict  to  be  rendered.  He  that  seeketh  findeth,  and  as  a  con- 
sequence of  the  enormous  mass  of  work  exacted  from  the  courts 
of  arbitration,  the  resultant  brevity  customary  in  many  places 
when  recording  the  written  basis  of  the  verdicts,  and  the  impos- 
sibility of  foreseeing  what  the  Imperial  Insurance  Office  will 
finally  deem  essential,  almost  every  verdict  of  a  court  of  arbitra- 
tion will  include  some  such  contradiction  to  the  evident  contents 
of  the  records.  The  verdict  is  then  annulled,  and  the  case  is 
returned  to  the  lower  court  for  reconsideration,  frequently  when 
it  is  perfectly  clear  that  the  final  result,  notwithstanding  all  these 
precautions,  will  be  unfavorable  to  the  person  insured.  Even 
if  there  be  no  other  outcome,  the  court  of  arbitration  is  supposed 
to  receive  "educational  influence";  although  it  may  be  ques- 
tioned whether  such  influence  is  the  purpose  of  jurisdiction,  and 
whether  infinite  harm  may  not  be  wrought  to  insurance  by  arous- 
ing empty  hopes  in  the  insured.  Once  more  figures  are  eloquent. 
Of  the  6,161  retrial  decisions  in  1909,  15.3%  call  for  recon- 

32 


sideration  of  the  case  by  a  lower  court,  and  there  are  instances  in 
which  a  case  has  been  sent  back  for  reconsideration  two,  and 
probably  even  three,  times. 

Attention  has  already  been  called  to  the  perils  threatening 
jurisdiction  when  it  is  based  on  subjective  sentiment  rather  than 
on  the  objective  foundation  of  the  law,  and  when  it  derives  its 
decisions  from  benevolence,  social  sympathy,  humanitarianism,  or 
whatever  other  feelings  these  unhallowed  catchwords  cover.  This 
may  readily  be  perceived  in  deliberations  on  a  case  that  really 
admits  of  doubt.  The  concepts  and  principles  of  jurisprudence 
are  extremely  unpopular  in  the  Imperial  Insurance  Office;  the 
most  subtle  legal  argument  falls  flat  before  the  charge  that  it  is 
not  social,  and  the  most  that  such  pleading  can  do  is  to  give  an 
external  justification  to  a  decision  that  has  been  rendered  from 
motives  of  benevolence.  Consequently  there  is  not  only  a  general 
and  increasing  decline  in  theoretical  interest  in  the  law  of  work- 
ingmen's  insurance,  to  which  many  distinguished  authorities  at 
first  devoted  themselves,  but,  with  the  exception  of  some  valuable 
commentaries,  the  circles  of  the  Imperial  Insurance  Office  have 
themselves  written  practically  nothing  but  guides  through  the 
mazes  of  jurisdiction  and  similar  aids  in  service  of  a  prejudice 
that  may  indeed  be  necessary,  yet  is  of  an  inferior  character  both 
intellectually  and  ethically.  How  different  is  this  condition  of 
affairs  from  that  which  prevails  in  the  Supreme  Court  of  the 
Empire  and  in  other  supreme  courts,  even  though  its  wide  scope 
of  duties  fully  entitles  the  Imperial  Insurance  Office  to  be  con- 
sidered their  equal!  Yet  a  celebrated  Secretary  of  State  in  the 
Imperial  Ministry  of  the  Interior  has  made  scholarly  study  of 
the  legal  aspects  of  their  professional  activity  practically  impos- 
sible for  members  of  the  Imperial  Insurance  Office  by  making 
publications  on  these  themes  dependent  on  his  approval.  In  his 
day  Bismarck  declared  that  he  would  make  the  Federal  Council 
small  to  strengthen  the  Imperial  Insurance  Office;  his  successors 
hold  it  down  whenever  they  can.  Can  the  Office,  then,  be  blamed 
when  the  majority  of  its  members,  who  are  allowed  to  see  noth- 
ing but  recourses  and  retrials,  are  submerged  in  petty  details,  and 
lose  sight  of  widesweeping  points  of  view? 

This  neglect  of  broad  outlook  in  favor  of  assistance  in  indi- 
vidual cases  is  one  of  the  grave  detriments  to  the  insurance  busi- 
ness of  the  present  day,  and  it  has  infected  the  entire  domain  of 
jurisdiction.  This,  more  than  anything  else,  should  be  kept  free 
from  considerations  based  on  personal  sentiment,  which  is  an 

33 


utterly  unstable  foundation.  Perhaps  this  is  the  very  point  where 
subsequent  reality  has  diverged  most  widely — and  most  pain- 
fully— from  the  concept  which  guided  the  legislator.  Yet  it  is 
precisely  here  that  the  Imperial  Insurance  Office  finds  a  special 
and  justifiable  characteristic  (or,  rather,  the  glory)  of  its  jurisdic- 
tion, and  it  devotes  a  lengthy  defence  to  the  concept  that  its  ver- 
dicts, "in  conformity  with  the  intention  of  the  legislator,  must  be 
filled  with  that  spirit  of  benevolence  toward  those  who  both  need 
and  are  entitled  to  protection  that  has  long  been  customarily 
designated  'social  and  political  sentiment.' "  Herein  it  enjoys 
the  unstinted  applause  of  its  former  senatorial  president — now 
counsellor  to  the  Superior  Court  of  Administration — Dr.  Wey- 
mann,  who,  in  the  March  number  of  the  Preussische  Jahrbucher, 
enthusiastically  exclaims:  "This  is  jurisdiction  indeed,  from 
whose  eyes  flashes  the  native  hue  of  resolution."  Herr  Weymann 
proceeds  with  the  admirable  statement  that  in  our  jurisdiction 
and  jurisprudence  a  ceaseless  battle  is  being  waged  for  the 
victory  of  the  right  with  the  concepts  that  are  conducive  to  it, 
and  as  whose  antitheses  he  brands  those  "dialectic  and  purely 
formalistic  views  characterized  by  the  maxim,  fiat  justitia,  pereat 
mundus."  Similar  views  have  recently  been  promulgated  through 
an  appeal  from  Cologne  regarding  the  alleged  need  of  reform — 
what  does  not  need  reform  to-day? — in  our  administration  of 
justice.  This  is  not  the  place  for  a  general  discussion  of  this 
special  shading  of  our  modern  movements  for  reform,  but  it  may 
be  noted  that  Emperor  Ferdinand  I.  employed  this  Latin  aphor- 
ism in  a  very  different  sense  from  what  is  customary  to-day, 
when  it  commonly  serves  as  a  catchword  to  condemn  jurisdiction 
which  is  in  conformity  with  the  law.  The  Emperor  meant,  as 
Zinkgrefs  German  rendering  clearly  shows,  that  justice  must 
prevail,  even  against  the  might  of  the  world ;  that,  in  other  words, 
right  is  more  than  might,  a  position  that  scarcely  any  one  will 
deny.  The  only  lamentable  fact  is  that  the  twisting  of  words 
which  is  now  so  popular,  and  which  is,  so  to  speak,  pursued  as  a 
regular  sport,  immediately  gives  rise  to  the  question,  "What  is 
justice?"  It  must,  however,  be  borne  in  mind  that  this  jurisdic- 
tion which  is  in  conformity  with  the  law — this  stumbling-block 
of  all  precipitation  and  excrescence,  for  which  neither  the  Impe- 
rial Insurance  Office  nor  Herr  Weymann  would  plead — has,  long 
since,  been  recast  into  the  formula,  fiat  justitia,  ne  pereat  mundus, 
thus  obviating  all  misinterpretation  of  the  Emperor's  words.  Yet 
from  this  point  of  view  the  type  of  jurisdiction  emanating  from 

34 


the  Imperial  Insurance  Office  can  not  be  pronounced  altogether 
fortunate,  even  by  its  warmest  admirers. 

In  consequence  of  the  basal  principle  which  we  are  here  oppos- 
ing, the  senatorial  members  of  the  Office,  and  especially  the  presi- 
dent, must  submit  to  being  occasionally  informed  by  zealous 
representatives  of  the  insured  that  it  is  their  duty  to  decide  invari- 
ably in  favor  of  the  workingman  in  case  of  doubt;  and,  in  addi- 
tion, those  insured  persons  who  are  called  to  the  Imperial  Insur- 
ance Office  in  Berlin  are  immediately  introduced  to  a  body  of 
associate  justices  who  are  blessed  by  being  controlled  by  the 
Social  Democrats,  and  the  new  members  there  receive  corre- 
sponding instruction  as  to  their  judicial  duties.  Even  associate 
judges  who  have  had  a  legal  training  cling  tenaciously  to  the  idea 
that,  in  pension  cases,  a  conviction  of  a  very  peculiar  nature  is 
requisite  either  for  affirmation  or  for  denial.  Here  again  the 
reason  lies  in  a  decision  of  the  Imperial  Insurance  Office — a  de- 
cision which,  in  the  abstract,  was  rilled  with  good  intentions  and 
based  on  a  solid  foundation.  This  ruling,  designed  to  elucidate 
the  concept  of  untrammeled  estimation  of  the  value  of  the  evi- 
dence offered,  declared  that  a  court  of  arbitration  might,  under 
certain  circumstances,  base  its  verdict  simply  on  probability,  pro- 
vided this  gave  conclusive  evidence  of  the  existence  or  non-exist- 
ence of  an  actual  state  of  affairs.  Since,  however,  "rigid  proof" 
was  required  in  other  cases,  as  in  the  exceptional  instance  of 
hernia  as  a  result  of  accident,  the  theory  was  developed  that  a 
minor  degree  of  certainty — possibly  even  mere  probability — was 
sufficient  reason  for  granting  a  pension.  The  remark  may,  there- 
fore, frequently  be  heard  that,  "As  a  man  I  am  convinced  that 
the  claim  lacks  all  foundation,  but  as  a  judge  I  do  not  feel  myself 
justified  in  denying  the  pension."  Such  considerations  are  very 
proper  for  an  overseer  of  the  poor,  but  not  for  a  judge  in -a  court 
of  law ;  and  yet  how  could  they  be  refuted  by  counter-arguments  ? 
Thus  the  insurance  courts  are  invaded  by  the  crying  evil  of  our 
courts  with  juries,  that  the  judge's  convictions  are  influenced  only 
too  easily  by  external  considerations  foreign  to  his  domain;  and 
this  evil  is  here  perhaps  the  more  corrupting  since,  though  it  is 
better — at  least  in  the  popular  mind — to  acquit  any  number  who 
are  guilty  rather  than  condemn  one  who  is  innocent,  in  insurance 
not  "only"  does  the  certainty  of  the  law  suffer,  but  the  insurance 
carriers  are  also  overburdened.  Moreover,  in  the  other  courts 
this  problem  touches  only  isolated  cases;  but  in  the  insurance 
courts  the  question  affects  a  fundamental  point  of  view  which,  in 

35 


the  end,  imperils  the  entire  institution  without  reaching,  as  will 
be  shown  below  (page  59),  a  result  that  gives  even  an  approxi- 
mate degree  of  compensation. 

Nor  is  this  all.  Men — and  judges  are  but  men — render  ex- 
tremely divergent  decisions  according  to  their  views  and  senti- 
ments, and  according  to  their  own  circumstances  and  their  power 
of  resisting  external  influences.  Where,  therefore,  no  rigid  form 
of  law  has  fortunately  been  found  to  compel  decision  one  way 
or  the  other,  views  as  to  what  is  right  vary  in  considerable  meas- 
ure. This  is  shown  in  the  simplest  concepts,  in  the  most  ordinary 
considerations  of  every-day  life.  Many  associate  judges,  for 
example,  give  much  weight  to  the  wages  still  received  by  the 
injured  party,  while  others  consider  this  point  wholly  immaterial. 
These  and  similar  contradictions  thus  become  no  rare  occurrence 
in  the  verdicts  rendered  by  every  court;  and  the  connotations  in 
the  mind  of  each  individual  of  such  obscure  concepts  as  "social," 
and  such  subjective  ideas  as  "benevolence,"  can  not  fail  to  be 
manifold.  Much  divergency  is,  therefore,  inevitable  in  a  juris- 
diction which  operates  with  such  bases  of  decision.  Since  no  one, 
outside  a  very  narrow  circle,  understands  the  subtleties  by  which 
the  Imperial  Insurance  Office  construes  a  peculiar  case — one 
which,  in  other  words,  calls  for  the  granting  of  a  pension  con- 
trary to  the  normal  rule — a  fertile  soil  is  prepared  for  the  charge 
of  partiality.  Lamentations  are  rife  that  jurisdiction  and  the 
people  are  aliens  to  each  other.  In  opposition  to  this  attitude  one 
of  our  foremost  judges  has  well  argued,  in  a  Festschrift  in  honor 
of  the  University  of  Berlin,  that  the  reason  for  this  phenomenon 
lies  in  the  steadily  increasing  lack  of  knowledge  of  the  nature  of 
law,  the  deterioration  of  such  knowledge  being  accelerated  by  a 
system  of  jurisprudence  which  substitutes  vague  sentiment  for 
fixed  rules  of  law.  This  has  likewise  been  recognized  by  Pro- 
fessor Rosin  in  his  review  of  the  new  "Handbook"  of  the  Im- 
perial Insurance  Office  (Preussisches  Verwaltungsblatt.  Dec.  3, 
1910).  Establishing  the  fact  of  excessive  influence  of  social  and 
political  sentiment  on  the  rendering  of  verdicts,  he  queries 
whether,  in  view  of  this,  it  is  really  advisable  to  maintain  a  special 
insurance  for  accidents  contingent  upon  occupation,  in  addition 
to  the  general  insurance  of  invalids  and  survivors.  This  thorough 
student  of  our  workingmen's  insurance,  to  whom  the  greatest 
indebtedness  is  due  as  regards  its  juristic  construction,  is  con- 
vinced of  the  impracticability  of  uniting  the  strict  judicial  de- 
cision which  the  rules  of  accident  insurance  demand  with  the 

36 


endeavor  to  make  the  services  of  such  insurance  effective  in  the 
widest  measure  possible.  As  a  matter  of  fact,  one  or  the  other 
of  these  aims  must  recede  into  the  background;  and  a  few  ex- 
amples will  show  how  jurisdiction  gets  around  this  difficulty. 

As  already  noted,  the  question  of  the  degree  of  earning  capacity 
still  possessed  by  an  injured  person  is  by  far  the  most  frequent 
problem  for  decision;  and  this  holds  good  whether  it  is  a  case 
of  indemnity  for  the  first  time,  or  an  increase  or  decrease  of 
pension  in  view  of  aggravation  or  improvement  in  the  plaintiff's 
condition.  It  is  evident  from  the  very  first  how  important  a  role 
is  played  by  the  personal  sentiment  of  the  individual  judge — the 
greater  or  less  degree  of  his  "friendship  for  the  workingman," 
his  knowledge  of  conditions  in  the  various  trades,  the  credence 
which  he  gives  to  the  allegations  of  the  person  injured,  his 
personal  experiences — possibly  by  a  similar  injury  sustained  by 
himself  or  within  the  circle  of  his  acquaintances — and  his  degree 
of  confidence  in  medical  science.  This  consideration  should  of 
itself  be  sufficient  to  relieve  a  judge  in  a  court  of  last  appeal  from 
such  decisions.  It  is  true  that  two  tables  have  been  drawn  up 
showing  the  valuations  placed  on  individual  injuries,  such  as  the 
loss  of  an  eye,  arm,  or  leg.  Similar  data  are  given,  as  is  well 
known,  with  almost  comic  minuteness  in  the  folk-laws  of  the 
ancient  Germanic  peoples,  and  also  by  very  modern  insurance 
companies,  while  tables  of  the  same  sort  have  been  compiled  from 
the  decisions  of  the  Imperial  Insurance  Office.  It  is  perfectly 
true  that  the  Office  declines — and  with  entire  justice — to  formu- 
late a  rate  table  which  shall  be  valid  generally,  and  that  it  reserves 
for  itself  the  right  of  estimating  damages  according  to  each  in- 
dividual case.  Yet  even  here — and  again  with  entire  justice — 
certain  fixed  principles  have  been  developed,  as  that  the  loss  of 
an  eye  regularly  entitles  a  workingman  to  from  30  to  ^Z1A% 
of  the  pension  for  complete  loss  of  earning  capacity.  This  very 
principle  is  one  of  those  most  constantly  opposed.  The  Trades 
Associations  have  given  the  Office  long  extracts  from  the  pay- 
rolls which  prove  beyond  all  doubt  that  very  many  workingmen — 
if  not  the  majority  of  them — receive,  after  losing  an  eye,  pre- 
cisely the  same  wages  as  those  who  have  suffered  no  injury,  and 
as  they  themselves  did  previous  to  their  accident;  and  that  these 
maimed  workingmen  share  in  the  increase  of  wages  that  are 
either  general  or  to  be  secured  by  the  workingman's  own  services. 
A  still  more  curious  result  arises  from  certain  combinations  of 
injuries  to  the  hands  or  fingers.  It  has  been  shown  that  such 

37 


injuries,  when  received  in  brawls  or  in  other  ways  unconnected 
with  the  workingman's  occupation,  do  not  prevent  him  from 
gaining  his  old  wages  within  a  short  time,  for  the  adaptability  and 
habituation  of  the  human  body  are  nothing  short  of  marvelous. 
Nevertheless,  an  industrial  accident  with  exactly  the  same  results 
was  indemnified  with  a  pension  of  30%,  or  even  more.  There 
are  workingmen,  especially  among  those  engaged  in  the  wood 
industry,  who  draw  pensions  of  from  30  to  40%  for  two,  three, 
and  even  four  accidents  of  this  type,  which  are  very  frequent 
in  their  occupation;  and  yet  earn  full  wages.  An  especially 
troublesome  difficulty  results  from  a  decision  of  the  Imperial 
Insurance  Office  which  is  again  perfectly  justifiable  in  the  abstract 
and  which,  in  awarding  damages  for  an  accident,  requires  that 
injuries  existent  before  the  accident  in  question  be  taken  into 
consideration.  It  is  evident  that  a  man  suffering  from  an  old 
injury  to  his  hand  receives  more  harm  if  he  is  also  injured  in 
the  leg  than  if  he  had  previously  been  entirely  uninjured;  or, 
to  put  the  case  more  strongly,  the  loss  of  the  second  eye  is  incom- 
parably worse  than  the  blinding  of  the  first.  On  the  other  hand, 
it  is  unjust  to  make  the  Trades  Association  responsible  for  con- 
sequences which  have  their  origin  in  the  injured  man  himself; 
and  it  thus  becomes  most  difficult  to  find  a  golden  mean  that  will 
satisfy  both  parties'  sense  of  justice.  In  agricultural  insurance 
provision  has  been  made  for  such  cases  by  estimating  the  pensions 
according  to  the  corresponding  loss  of  yearly  wages.  Yet  even 
here  benevolence  still  has  a  scope  which  can  scarcely  be  recon- 
ciled with  the  duty  of  a  judge  to  consider  simply  the  facts  in  the 
case  before  him.  Thus,  for  example,  a  court  of  arbitration  known 
to  be  particularly  "friendly  to  the  workingman"  once  awarded 
a  pension  on  the  basis  of  complete  and  undiminished  wages  to  an 
injured  farmer  who  had  been  deaf  and  dumb  prior  to  his  accident ; 
though  there  could  be  no  doubt  that  if  he  had  lost  his  speech 
and  hearing  through  an  accident  incurred  in  his  occupation,  he 
would  have  been  granted  a  very  high  pension,  if  not,  indeed,  the 
highest. 

The  question  whether  an  accident  is  to  be  regarded  as  incurred 
in  the  pursuit  of  an  occupation,  whether  it  is,  in  other  words, 
to  be  indemnified  by  an  accident  pension,  would  seem  at  first 
blush  to  be  the  problem  that  might  most  readily  be  solved  by 
legal  considerations,  so  that  here  benevolence  would  appear  to 
have  its  smallest  range  of  action.  Experience,  however,  teaches 
a  very  different  lesson.  It  is  a  recognized  principle  that  accident 

38 


insurance  is  awarded  only  for  injury  by  an  actual  accident,  not 
for  a  sickness  which  the  insured  has  contracted  in  consequence 
of  his  trade  employment.  Accordingly,  every  possible  effort 
has  been  made  to  construe  the  law  so  as  to  make  the  Trades 
Associations  responsible  in  these  cases  as  well.  Thus,  for  ex- 
ample, many  cases  of  poisoning,  which  normally  do  not  become 
perceptible  until  the  harmful  influence  has  long  been  operative, 
are  regarded  by  one  theory  as  the  result  of  a  number — which, 
under  certain  circumstances,  may  be  very  great — of  small  in- 
dividual industrial  accidents,  each  consisting  in  one  inhalation  of 
the  deleterious  substance.  Although  this  theory  has  not  yet  become 
dominant  in  jurisdiction,  kindred  views  have  long  prevailed.  In- 
dustrial accident  is  assumed  not  only  in  cases  where  the  injury 
results  from  a  single,  sudden  occurrence,  but  also  where  the 
injurious  process  did  and  must  continue  for  some  time  in  order 
to  produce  an  effect  prejudicial  to  earning  capacity,  such  as 
colds  as  a  result  of  working  in  water,  heat  stroke  from  remaining 
in  excessive  heat,  paralysis  from  working  in  rooms  where  electric 
machines  are  in  operation,  and  the  like.  If  in  such  cases  the 
distinction  between  sickness  and  accident  is  made  to  consist  in 
the  length  of  time  that  the  deleterious  influence  has  continued, 
the  door  is  opened  wide  to  subjective  estimates,  to  social  and 
political  sentiment,  and  to  benevolence.  A  precisely  similar  prob- 
lem emerges  in  cases  where  a  sickness  latent  in  the  person 
insured  breaks  out  in  consequence  of  some  process  connected 
with  his  occupation,  as  happens,  for  instance,  when  persons  with 
a  tendency  to  consumption  are  obliged  to  lift  and  carry.  Or  if 
a  disease — perhaps  merely  the  weakness  of  old  age — which  still 
permits  the  sufferer  some  measure  of  toil  is  so  aggravated  in 
consequence  of  a  slight  accident,  as  is  frequently  the  case,  that 
he  can  no  longer  do  any  work  whatever,  is  the  old  disease  or  the 
slight  accident  the  reason  of  the  cessation  of  his  earning  capacity  ? 
These  cases  are  frequently  complicated  by  death,  which  the  person 
insured  might  indeed  have  expected  in  the  near  future,  but  which 
may  have  been  hastened  by  the  accident,  and  perhaps  also  by  the 
excitement  incidental  to  it,  the  confinement  to  his  bed,  and  the 
like.  Is  the  man  then  killed  by  the  accident?  In  these  cases 
decision  is  rendered  in  favor  of  the  insured  when  the  accident  was 
an  essential  contributory  factor  in  causing  his  loss  of  earning 
capacity  or  his  death ;  and  the  estimate  placed  upon  "essential" 
is  again  determined  by  benevolence. 

Even  abstract  questions  of  law  are  brought  within  this  fatal 

39 


sphere.  That  accidents  incurred  while  on  the  way  to  work  can  not 
be  deemed  industrial  accidents  scarcely  requires  proof,  and  yet  all 
kinds  of  indirect  ways  have  been  devised  to  help  those  who  have 
thus  been  injured  to  secure  pensions,  so  that  many  grants  have 
been  made  in  cases  where  the  employee  chanced  to  be  carrying 
a  tool  which  contributed  to  the  accident,  or  where  his  employer 
directed  him  to  take  a  certain  road,  or  to  attend  to  this  or  that 
on  the  way,  and  the  like.  The  extreme  difficulty  of  deciding, 
under  certain  circumstances,  and  especially  in  agricultural  oc- 
cupations, between  uninsured  labor  on  one's  own  account  and 
insured  industrial  activity  has  led,  on  the  one  hand,  to  a  most 
agonized  splitting  of  hairs  or  to  a  divergent  decision  of  similar 
cases,  based  on  the  chances  involved  in  rendering  the  verdict; 
while,  on  the  other  hand,  it  has  given  rise  to  most  marvelous 
assertions  by  those  who  have  been  injured,  that  they  may  prove 
that  the  injuries  in  question  were  received  in  consequence  of  their 
occupation.  Two  particularly  striking  examples  will  be  sufficient 
to  show  this.  A  farmer  was  injured  on  his  way  to  church,  but 
he  claimed  that  he  was  going  to  pray  for  rain,  that  his  journey 
had,  therefore,  been  made  in  the  interests  of  agriculture,  and  that 
he  should  receive  compensation  for  his  accident.  In  undressing 
her  daughter,  aged  six  years,  a  peasant  woman  injured  her 
finger,  which,  on  account  of  subsequent  infection,  had  to  be  ampu- 
tated. She  declared  that  the  child  had  been  engaged  in  agricul- 
ture, since  it  had  kept  the  geese;  the  undressing  of  the  child, 
therefore,  should  be  considered  the  same  as  unharnessing  a 
draft  animal,  and  should  be  accounted  an  agricultural  opera- 
tion. The  very  preferment  of  such  claims  shows  what  may  be 
expected  in  the  courts  of  jurisdiction,  and  any  one  who  glances 
through  the  volumes  of  published  decisions  will  often  be  aston- 
ished to  see  all  the  calamities  that  are  forced  into  the  category 
of  accidents  incurred  in  the  course  of  occupation.  In  this  way 
the  jurisdiction  contributes  to  the  unnatural  growth  of  industrial 
accidents.  In  1886  the  accidents  reported  were  100,159,  and 
damages  were  awarded  in  10,540  cases ;  in  1908  these  figures  were 
662,321  and  142,965  respectively.  Then  words  were  poured  out 
in  the  Reichstag  to  lament  the  sacrifices  demanded  by  the  Moloch 
of  capital,  and  foreigners  to  whom  our  insurance  was  lauded 
pointed  to  this  increase  and  emphatically  declined  to  allow  it  to 
be  introduced  in  their  own  countries. 

As  a  matter  of  fact,  the  entire  system  of  this  jurisdiction,  espe- 
cially in  accident  insurance  cases,  might  here  be  set  forth,  subject 

40 


after  subject,  and  controversy  after  controversy;  and  it  might 
be  shown  how  it  has  been  possible  to  transcend  even  the  benefi- 
cent intentions  of  the  legislator  at  every  time  and  in  every  place, 
regardless  of  any  union  of  the  advantages  granted  the  insured 
with  consideration  for  the  common  weal,  or  with  the  justice  due 
the  Trades  Associations  as  the  party  of  the  second  part.  Only 
cursory  mention  can  be  made  of  the  controversies  centering 
around  yearly  wages  as  the  basis  of  estimating  pensions.  Con- 
trary to  the  intention  of  the  law,  which  was  designed  to  secure  a 
certain  average  in  such  estimations,  and  which  sought  also  to 
express  the  concept  that  the  workingmen  should  contribute  at 
least  indirectly  to  the  expenses  of  insurance,  the  courts  have 
exerted  every  effort  to  credit  the  insured  never  with  less,  and, 
wherever  possible,  with  more,  than  his  actual  wages,  the  attempt 
thus  being  made  to  compensate  him  for  the  "wrongs"  which  he 
suffered  on  account  of  the  legal  provision  that  loss  of  his  entire 
earning  capacity  could  be  indemnified  only  to  the  extent  of  two- 
thirds  of  his  wages.  To  this  must  be  added  the  endeavor  to 
extend  the  benefits  of  insurance  in  widest  possible  measure  to 
persons  and  legal  relations  which  hitherto  it  had  not  comprised. 
The  deciding  senates  repeatedly  declared  industries  insured  which 
the  administrative  division  invariably  emphatically  declined  to 
insure ;  and  similar  difficulties  were  involved  in  carrying  through 
the  insurance  itself,  with  its  registration,  reckoning  of  contribu- 
tions, and  other  necessary  details,  as  when,  for  example,  some 
person  hitherto  considered  to  be  independent  is  held  to  have  en- 
tered upon  or  to  have  been  transferred  to  an  industry  for  the 
sake  of  the  pension. 

With  full  consideration  of  the  dangers  of  supplementary  defi- 
nitions, and  with  due  regard  for  the  general  security  of  the  law, 
the  legislator  had  very  intentionally  laid  down  clear  rules  as  to 
forfeiture  of  claims  through  non-use  within  a  given  time.  Never- 
theless, this  is  frequently  considered  unfair;  and  the  Trades  As- 
sociations, which  are  supposed  to  act  with  all  the  conscientious- 
ness of  a  faithful  guardian,  are  even  objects  of  suspicion  if  they 
raise  this  objection,  although  no  guardian  would  escape  an  action 
for  damages  should  he  fail  to  employ  it.  In  considering  whether 
and  how  far  the  insured  may  possibly  have  been  prevented  from 
securing  his  rights  because  of  circumstances  beyond  his  control, 
so  that  forfeiture  by  expiration  of  time-limit  can  not  be  counted 
against  him,  jurisdiction  develops  a  degree  of  condescension  which 
lowers  the  workingman  to  the  level  of  a  child  incapable  of  judg- 


ment,  and,  as  a  sorry  compensation,  makes  this  beneficial  rule  an 
empty  and  totally  ineffectual  bogy.  Absolute  ignorance  is  fre- 
quently imputed  to  the  "poor,  ignorant  workingman."  For 
example,  a  decision  was  once  formulated  with  infinite  toil  and 
trouble  which  assumed  that  the  person  insured  was  aware  that 
a  letter  must  have  a  postage  stamp,  or  else  it  runs  the  risk  of 
being  refused  by  the  addressee.  The  same  people  who  demand 
for  the  workingman  the  most  sweeping  control  in  the  guidance  of 
the  State  can  not  do  enough  to  prove  his  mental  limitations  where 
his  most  vital  private  interests  are  concerned. 

The  law  sought  also  to  protect  the  workingman  against  acci- 
dents due  to  carelessness  and  inattention,  and  it  accordingly 
authorized  the  employer  to  frame  prohibitions  designed  to  obvi- 
ate any  possible  dangers  arising  from  this  cause.  Acting  on  this 
principle,  jurisdiction  long  maintained  that  a  workingman  who 
disobeyed  such  a  prohibition  which  had  been  made  properly  effec- 
tive placed  himself  "outside  his  industry,"  and  accordingly  lost 
all  claim  to  a  pension  in  case  of  accident.  This  ruling  has  recently 
been  abandoned.  In  considering  the  occupations  incidental  to  an 
industry  the  causal  relation  between  accident  and  industry  requi- 
site to  recognition  of  an  industrial  accident  is  no  longer  excluded 
by  the  fact  that  the  person  insured  may  have  incurred  the  acci- 
dent in  question  because  of  his  disregard  of  a  prohibition  of  the 
type  just  described.  This  decision  is  certainly  extraordinarily 
friendly  to  the  workingman,  but  its  perils  are  equally  extraordi- 
nary, since  it  cripples  the  efficiency  of  regulations  framed  to 
prevent  accidents,  and,  consequently,  the  protection  of  the  work- 
ingman, which  is  acknowledged  to  be  an  important  function  of 
accident  insurance. 

One  more  point  may  be  cited  in  conclusion  to  show  how  far 
jurisdiction  has  carried  the  principle  of  the  favor  of  the  law. 
With  a  childlike  trust  that  was  almost  pathetic,  the  law  granted 
to  those  who  were  insured  exemption  from  all  costs  and  fees  in 
the  prosecution  of  their  legal  claims.  At  the  same  time  the  courts 
were  empowered  to  decide  whether  the  party  against  whom  ver- 
dict was  rendered  should  pay  its  opponent  extrajudicial  fees, 
and,  if  so,  what  these  fees  should  be ;  and  also  to  determine  what 
expenses  would  be  necessary  for  legal  cognizance  of  the  claims 
and  rights  in  question.  In  consequence  of  the  unexpectedly  rapid 
growth  of  legal  rights,  the  amendment  of  1900  held  that  some 
means  of  protection  must  be  created,  and  it  empowered  the  courts 
to  impose  on  the  parties  such  costs  as  should  accrue  from  the 

42 


wanton  prosecution  of  a  hopeless  claim.  What  was  the  result 
of  these  regulations?  Extra  judicial  fees  were  practically  never 
allowed  to  the  Trades  Associations,  while  they  were  granted  to 
the  insured  in  ever  augmented  measure,  even  when  the  insured 
could  allege  no  real  basis  for  their  claims.  Sometimes  mere 
inspection  of  the  injured  member,  or  even  nothing  more  than 
personal  impression,  was  considered  to  be  the  taking  of  evidence, 
in  order  to  reimburse  the  costs  incurred  by  the  party  against 
whom  verdict  was  rendered.  This  may,  perhaps,  occasionally 
pass  unchallenged  in  the  courts  of  arbitration,  yet  it  obviously 
creates  another  strong  temptation  which,  in  case  of  unwelcome 
verdict  in  a  suit,  results  in  the  direct  opposite  of  the  reconcilia- 
tion sought.  As  a  matter  of  fact,  people  with  perfectly  hopeless 
claims  travel  across  the  whole  of  Germany  to  Berlin ;  the  expenses 
of  the  trip  to  the  capital  have  been  scraped  together  by  borrow- 
ing; and  the  return  must  be  ultimately  contested  by  the  Depart- 
ment of  Poor  Relief  at  a  cost  of  infinite  correspondence,  annoy- 
ance, and  vexation.  Yet  it  is  extremely  rare  for  the  poena  temere 
litigantium  to  be  imposed,  and  the  Imperial  Insurance  Office  itself 
acknowledges  that  it  has  "little  inclination"  to  penalize  the  insured 
with  costs,  since  they  can  seldom  be  collected,  and  although  they 
may  legally  be  charged  against  the  pension,  this  course  "easily 
leads  to  hardships,  and  causes  embitterment" — an  argument  which 
appears  to  be  entirely  insufficient  to  justify  the  elimination  of  a 
defence  provided  by  the  law  with  the  express  intention  of  obviat- 
ing an  abuse  whose  existence  is  universally  recognized. 

Naturally  the  Imperial  Insurance  Office  is  chiefly  responsible 
for  the  tendency  developed  by  jurisdiction,  for  its  decisions  form 
the  model  for,  and  are  in  certain  respects  binding  on,  the  ver- 
dicts of  the  courts  of  arbitration.  Nevertheless,  the  courts  of 
arbitration  must  themselves  be  held  partly  responsible  for  this 
development  of  actual  administration,  for,  being  still  closer  to  the 
facts  than  the  authorities  in  Berlin,  they  might  have  protected 
themselves  against  an  extension  of  the  benefits  of  insurance  whose 
suspicious  character  they  could  perhaps  have  estimated  with  still 
greater  impartiality.  The  fact  that  the  courts  of  arbitration  have 
failed  to  realize  this  expectation,  and  that  they  have,  as  a  whole, 
assumed  and  maintained  a  position  characterized  by  complete 
loss  of  independence,  is  certainly  due  in  great  part  to  the  scanty 
esteem  accorded,  as  has  already  been  noted  repeatedly,  to  insur- 
ance by  the  administrative  authorities  of  the  State,  since  they  only 
too  frequently  employ  as  presiding  officers  of  the  courts  of  arbi- 

43 


tration  associate  judges  who  have  just  passed  their  examinations, 
and  who,  though  young  and  well  trained,  have  no  qualifications 
except  benevolence  for  their  difficult  position,  so  that  they  often 
act  as  a  drag  on  the  decision  of  many  claims  in  cases  where  such 
decision  has  in  the  meantime  become  more  strict.  The  grave 
errors  which  frequently  result  may  be  seen  in  the  printed  decisions 
of  the  Imperial  Insurance  Office,  from  which  one  case  may  be 
cited  as  a  real  legal  curiosity:  a  court  of  arbitration  granted  a 
pension,  but,  in  formulating  its  reasons  for  this  decision,  became 
doubtful  of  the  justice  of  its  verdict,  which  it  "amended"  by  de- 
nying the  pension  in  question.  When  complaints  are  made  in  the 
Imperial  Insurance  Office  that  the  recourses  and  retrials  are 
increasing,  and  when  ways  and  means  to  remedy  this  state  of 
affairs  are  under  consideration,  the  carelessness  shown  in  the 
choice  of  presiding  officers  for  the  courts  of  arbitration  becomes 
particularly  evident,  especially  as  these  gentlemen  generally 
resign  their  positions  just  as  they  are  beginning  to  become 
familiar  with  their  duties.  Though  it  is  self-evident  that  there 
are  many  exceptions  to  this  rule,  the  trouble  is  that  they  are  only 
exceptions,  after  all ;  and  so  great  and  so  manifest  is  this  evil  that 
it  has  compelled  the  Trades  Associations  to  cling  to  the  legal 
means  of  recourse,  despite  the  grave  sacrifices  which  it  entails 
upon  them  in  other  respects  (see  above,  page  31). 

If  it  has  already  been  said  that  the  boards  entrusted  with  the 
duty  of  jurisdiction  have,  like  their  members,  shown  to  those 
who  are  insured  a  complaisance  which  exceeds  the  limits  of  the 
law,  this  does  not,  of  course,  imply  an  accusation  of  unlawful 
partiality.  These  judges  make  their  rulings  after  thorough  con- 
sideration of  the  case ;  they  act  according  to  their  best  knowledge 
and  belief;  and  they  are  guided  by  an  honorable  conviction,  fre- 
quently against  their  own  inclinations,  since  they  believe  that  they 
are  morally  bound  to  construe  the  law  and  their  duty  as  they  do. 
It  is  only  this  construction  which  is  criticized  in  the  remarks  here 
made,  which  are  intended  to  set  forth,  from  a  purely  scientific 
point  of  view,  a  divergent  interpretation.  Yet  it  is  beyond  all 
doubt  that  if  even  a  small  fraction  of  the  subtlety,  learning,  and 
care  now  employed  in  favor  of  the  insured  were  made  to  con- 
tribute to  the  best  interests  of  the  Trades  Associations  and  insur- 
ance institutions,  the  nauseatingly  familiar  cries  of  partizanship, 
class  justice,  robbery  of  the  people's  rights,  and  the  like  would 
be  raised.  This  statement  is  capable  of  proof.  When  the 
amended  accident  insurance  law  went  into  force,  laying  many  new 

44 


burdens  on  the  Trades  Associations  and  bringing  them  few  alle- 
viations of  their  load,  the  president  of  the  Imperial  Insurance 
Office  at  the  time  delivered  an  address  to  the  representatives  of 
the  Associations,  in  which  he  implied  that  the  Office  would  en- 
deavor to  protect  the  insurance  carriers  against  being  over- 
burdened, these  innocent  words  bringing  upon  him  a  torrent  of 
abuse. 

The  old  basal  principle  of  Roman  law,  liberum  corpus  non 
recipit  existimationem,  is  impossible  in  modern  times.  Its  proud 
dignity  finds  no  place  in  a  world  ruled  by  property  interests,  and 
where,  men  boast,  money  is  everything;  while  from  a  world  of 
poverty-stricken  masses  it  is  still  more  completely  alien.  It  could 
scarcely  be  expected,  therefore,  that  the  insured  would  observe 
any  restraint  whatsoever  in  their  demands  for  insurance;  but, 
on  the  contrary,  it  might  be  anticipated  that  the  insured  would 
strain  every  effort  to  secure  the  comforts  of  insurance  in  the 
greatest  possible  measure,  and  for  the  longest  possible  time.  The 
experience  of  many  years  has  shown  that  the  German  has  an  easy 
conscience  so  far  as  the  State  and  its  treasury  are  concerned,  and 
this  experience  is  confirmed  not  only  by  the  members  of  boards 
for  the  assessment  of  taxes,  but  by  every  one  who,  in  crossing  a 
frontier,  has  observed  how  assiduously  everything  is  concealed 
from  the  customs  inspectors.  Moreover,  litigiousness  has  always 
been  regarded  as  one  of  our  hereditary  faults,  so  that  even  the 
Imperial  Insurance  Office  lays  the  responsibility  for  the  enormous 
increase  of  appeals  and  recourses  on  "the  craze  for  litigation  and 
the  stubborn  insistence  on  alleged  rights  inherent  in  the  German 
mind,  and  the  morbid  tendency  to  go  to  law  to  the  greatest  pos- 
sible degree,  and  especially  to  exhaust  the  resources  of  every 
court."  It  must,  however,  be  noted  in  simple  justice  that  the 
numerous  foreigners,  especially  Poles  and  Italians,  who  gain  a 
livelihood  in  Germany  vie  with  our  compatriots  both  in  greed  and 
in  inventive  genius.  The  Latins  are  especially  cunning  in  taking 
advantage  of  our  institutions  for  the  promotion  of  the  general 
weal,  particularly  as  they  are  aided  by  their  possession  of  diplo- 
matic representation  in  Germany  and  by  the  friendly  relations 
required  by  our  share  in  the  Triple  Alliance.  As  a  rule,  the  entire 
village,  including  the  syndic  and  the  physician,  helps  the  pensioner 
whose  pension  the  wicked  Germans  wish  to  decrease  or  stop 
altogether.  In  the  last  year  800,000  marks  were  taken  from  the 
treasuries  of  the  Trades  Associations  to  Italy  alone,  a  fact  which 
may  be  recommended  to  the  consideration  of  the  organs  of  our 

45 


foreign  policies  when  in  the  future — as  has  so  often  happened  in 
the  past — Germans  resident  in  Italy  shall  suffer  injury,  and  even 
mistreatment,  in  the  course  of  their  occupations. 

For  the  general  reasons  just  set  forth,  it  was  from  the  very  first 
a  doubtful,  if  not  absolutely  incorrect,  mode  of  procedure  to  grant 
those  who  were  insured  exemption  from  costs  in  the  prosecution 
of  their  claims.  It  is  true  that  scarcely  anyone  could  have 
dreamed  that  insurance  would  have  been  abused  to  the  extent  and 
with  the  methods  that  have  actually  proved  to  be  the  case,  and  he 
who  looks  for  and  regards  something  higher  than  the  mere  multi- 
tude of  his  nation  can  feel  only  deep  and  bitter  pain  when  he  sees 
that  insurance  has  been  the  very  factor  which  has  led  to  univer- 
sal degeneration  and  demoralization.  To  all  who  have  not  them- 
selves passed  through  the  horrible  experience  it  will  be  perfectly 
incredible  how  far  beyond  the  generous  favor  of  the  law,  how 
far  beyond  the  still  more  generous  favor  of  all  the  authorities — 
even  those  of  the  Imperial  Insurance  Office — claims  are  carried, 
prosecuted  through  each  and  every  court,  and  driven  on  with  peti- 
tions for  workingmen's  aid,  memorials  directly  to  the  Emperor, 
and  complaints  to  all  competent  and  incompetent  authorities.  In 
considering  the  actual  operation  of  the  Imperial  Insurance  Office 
examples  have  been  given  (page  40)  of  the  gentle  art  of  prepar- 
ing claims,  and  while  in  all  else,  even  in  regard  to  the  elements 
of  insurance,  the  most  lamentable  ignorance  reigns,  a  knowledge 
of  backstairs  methods  of  dealing  with  important  points  has  been 
developed  to  a  degree  which  can  only  be  termed  amazing.  The 
enormous  scope  of  insurance  jurisdiction  aids  in  the  dissemina- 
tion of  this  knowledge  in  ever  widening  circles.  It  is  almost  ab- 
surd to  see  how  considerations  adopted  in  special  cases  to  grant  a 
pension  under  circumstances  that  would  normally  exclude  it 
penetrate  into  the  remotest  corners  and  become  the  common  prop- 
erty of  all  pension  hunters.  The  Imperial  Insurance  Office  once 
decided  that  an  accident  received  while  chopping  wood  should  be 
indemnified  because  it  was  shown  that  the  wood  in  question  was 
being  chopped  to  boil  fodder  for  cattle.  Since  that  time — at  least 
if  the  allegations  of  claimants  for  pensions  may  be  believed — 
cattle  have  never  and  nowhere  received  fodder  that  was  not  boiled, 
nor  has  wood  ever  been  chopped  except  to  boil  such  fodder. 

Here  again  the  individual  cases  might  be  taken  point  by  point, 
and  in  each  one  it  might  be  shown  how  those  who  are  insured 
seek  to  remove  the  last  barriers  that  may  possibly  still  prevent 
the  recognition  of  their  claims  by  means  of  what  can,  unfortu- 


nately,  be  termed  only  lies.  Once  more  only  a  few  examples  need 
here  be  cited.  Even  in  everyday  life  many  sickly  persons  are 
inclined  to  overrate  and  exaggerate  their  ills  and  aches,  and  the 
popular  modern  complaint  of  nervousness  has  essentially  fostered 
this  weakness  in  general.  Now  insurance  furnishes  a  shockingly 
fertile  soil  for  this  sort  of  nonsense,  and  here  grows  the  evil  and 
envenomed  weed  of  pension  hysteria,  one  of  the  most  melancholy 
consequences  of  our  wprkingmen's  insurance.  A  vast  amount  has 
been  written  concerning  this  evil,  from  the  time  when  Professor 
Oppenheim  discovered  "traumatic  neurosis"  in  1889,  until  it 
finally  enjoys  practical  unanimity  in  the  authoritative  circles  of  the 
medical  profession.  Windscheid's  clever  aphorism,  "Where  there 
is  no  pension,  there  is  no  accident  neurosis/'  sharply  and  clearly 
expresses  the  conviction  that  has  gradually  become  dominant; 
but  any  estimation  of  the  influence  exercised  upon  the  earning 
capacity  of  the  pension  claimant  through  phenomena  either  caused 
or  at  least  increased  by  his  "appetitive  concepts"  is  subject  to  the 
widest  variations  and  exposed  to  the  grossest  errors  with  physi- 
cians as  well  as  with  judges.  In  view  of  the  enormous  mass  of 
literature  on  the  subject,  reference  can  here  be  made  only  to  the 
admirable  discussion  of  Franz  C.  Miiller  (Zeitschrift  fur  Versi- 
cherungswissenschaft,  VII),  who  has  shown  in  detail  how  the 
evil  has  only  been  fostered  by  the  excessive  humanitarianism  of 
jurisdiction.  As  a  matter  of  fact,  those  who  are  insured  know 
how  to  take  advantage  of  the  difficulties  of  decision  which,  in  the 
last  analysis,  are  involved  in  even  the  simplest  case.  Whoever, 
in  the  course  of  his  occupation,  receives  an  injury,  which  may  be 
of  the  most  trivial  nature  and  which,  as  has  already  been  shown 
in  the  case  of  injuries  to  the  hand  (see  above,  page  38),  would 
not  disturb  him  in  the  least  under  other  circumstances,  guards 
it  like  a  veritable  treasure  and  tends  it  like  a  milch  cow.  From 
unconscious  exaggeration  to  direct  invention,  from  neglect  of  the 
treatment  prescribed  to  the  artificial  keeping  open  of  wounds, 
daily,  and  in  the  case  of  the  majority  of  those  injured,  there  is 
found  a  gradation  of  the  most  diverse  efforts  to  render  their 
condition  suitable  for  the  payment  of  a  pension.  Even  artificial 
limbs  and  similar  appliances  furnished  by  the  Trades  Associa- 
tions are  not  used,  are  carelessly  handled,  and  are  even  inten- 
tionally damaged  and  then  termed  injurious.  Every  sickness  and 
injury  a  man  either  has  or  ever  has  had  is  brought  into  con- 
nection with  the  accident,  the  allegation  being  either  that  the  sick- 
ness or  injury  was  caused  or  aggravated  by  the  accident,  or  that 

47 


it  is  to  be  regarded  as  accelerating  its  own  normal  consequences. 
Frequently  an  accident  is  deliberately  invited,  and  is  then  made 
to  serve  as  a  plea  for  a  pension  claim,  in  harmony  with  the  juris- 
diction already  described  (page  39)  in  cases  of  combination  of 
sickness  and  accident.  Whether  the  injury  is  great  or  small  makes 
no  difference.  The  vast  majority  of  cases,  as  stated  above  (page 
30),  involve  infinitesimal  injuries,  and  the  annullment  of  a  partial 
pension  of  10%  is  fought  with  the  same  bitterness  as  a  denial 
of  indemnity  for  the  gravest  sufferings.  Improvement  is  the 
last  thing  ever  to  be  acknowledged;  a  gradual  diminution  of  a 
pension  is  bewailed  as  a  continual  source  of  uneasiness,  and  its 
lessening  in  marked  degree  as  a  hardship.  Any  thought  of 
decreasing  a  pension  is  normally  answered  with  the  assertion  that 
the  trouble  is  growing  worse,  if  not  with  a  demand  that  the 
pension  be  increased,  and  in  this  way  an  accident  forms  the 
starting-point  of  a  series  of  suits  which  frequently  do  not  end 
even  at  the  death  of  the  man  injured,  since  a  pensioner  having 
other  persons  dependent  upon  him  can  scarcely  die  except  as  a 
result  of  an  accident  received  in  the  course  of  his  occupation, 
however  long  ago  this  accident  may  have  occurred,  and  however 
remote  its  cause,  medically  speaking,  from  his  last  illness.  It 
even  happens  frequently  that  an  industrial  accident  results  in  no 
injury  whatever,  and  the  man  injured  simply  imagines  that  his 
health  is  impaired.  Hereupon  he  ceases  to  work  and  prosecutes 
his  claim  through  all  the  courts,  especially  when,  as  may  be  the 
case,  he  has  behind  him  an  alleged  expert  who  gives  him  a  certif- 
icate that  this  imagination  constitutes  a  result  of  the  accident 
which  calls  for  damages.  In  one  such  case  the  Imperial  Insur- 
ance Office  denied  a  pension,  only  to  be  accused  publicly  of  lack 
of  social  intelligence. 

Here  again  is  manifested  the  lamentable  phenomenon  of  the 
transformation  of  reason  into  folly  and  of  the  change  of  benefits 
intended  into  injuries.  There  can  be  no  doubt  from  the  very 
first  that  the  pension,  the  indemnity,  should  constitute  only  the 
last  means  of  protection  to  one  who  has  suffered  an  injury,  and 
that  the  highest  aim  must  be  the  recovery  of  earning  capacity. 
The  law  accordingly  gave  both  the  Trades  Associations  and  the 
insurance  institutions  extensive  privileges  in  regard  to  the  medi- 
cal treatment  of  the  insured,  and  the  Imperial  Insurance  Office 
is  never  weary  of  urging  the  most  generous  use  of  these  privi- 
leges. But  there  is  an  alarmingly  large  number  of  the  injured 
who  are  absolutely  unwilling  to  be  cured.  The  regulation  that  the 

48 


insurance  carrier  must  sustain  the  cost  of  cure  gives  them  a 
welcome  opportunity  to  enjoy  themselves  in  every  way  on  an- 
other's money,  since  they  can  almost  invariably  find  a  compliant 
physician  who  will  certify  that  the  expenditures  desired  are 
necessary  and  proper,  regardless  of  their  relation  to  the  patient's 
former  modes  of  life  and  his  social  surroundings.  This  special 
method,  to  which  little  attention  has  thus  far  been  given,  of  taking 
selfish  advantage  of  the  benefits  of  insurance  to  an  excessive  and 
thoroughly  corrupting  degree  has  been  discussed  with  surprisingly 
rich  results  by  the  neurologist,  Dr.  Placzek,  in  a  lecture  reprinted 
in  the  Zeitschrift  fur  Bahn-  und  Bahnkasseridrzte  for  1910.  A 
single  one  of  his  examples  may  be  cited  here.  An  engineer  earn- 
ing 2,600  marks  a  year  met  with  an  accident  and  demanded  20 
marks  per  diem  for  48  days  during  which  he  had  been  nursed 
in  the  house  of  his  mother-in-law,  the  widow  of  a  post-office  clerk, 
this  total  of  980  marks  including  a  bottle  of  wine  daily  at  4 
marks,  caviar  or  asparagus  for  breakfast  and  supper,  and  177 
marks  for  cab  hire.  The  sanitariums  themselves,  which  have  been 
equipped  at  such  expense,  are  regarded  as  a  sort  of  "pension 
lever,"  and  are  often  the  scene  of  bitter  quarrels  that  give  ground 
for  a  very  low  opinion  of  the  "reconciling  influence"  of  working- 
men's  insurance,  in  view  of  the  complaints  and  allegations  of  poor 
food  and  bad  treatment — these  always  being,  of  course,  anony- 
mous, or  appearing  as  letters  to  the  daily  press — to  which  must 
be  added  sweeping  denunciations  of  the  physicians.  The  physi- 
cian is  commonly  supposed  to  be  the  best  friend  of  his  patient, 
but  here  he  is  regarded  as  the  bitterest  enemy,  against  whom  any 
and  every  weapon  may  be  used,  as  the  voluminous  examples 
given  by  Dr.  Placzek  amply  prove.  And  these  institutions  have 
an  unhealthy  influence  in  yet  another  regard.  Any  means  of 
deception  which  a  patient  may  not  previously  have  known  he  there 
learns  through  his  contact  with  real  or  alleged  fellow-patients, 
becoming  acquainted  with  the  chief  points  in  diagnosing  his 
complaint,  and  being  taught  how  to  feign  the  corresponding 
symptoms  if  they  do  not  arise  of  their  own  accord.  It  is  self- 
evident  that  his  political  education  becomes  perfect  in  this  ad- 
mirable school. 

In  cases  of  this  type  patients  who  exaggerate  their  sufferings 
because  of  anxiety  for  their  future  have  at  least  the  excuse  that 
they  can  plead  a  bona  fide  injury.  Accordingly,  the  Imperial  In- 
surance Office,  which,  to  do  it  justice,  unreservedly  acknowledges 
wild  exaggeration  on  the  part  of  many  claimants  for  pensions, 

49 


considers  it  humanly  explicable  that  a  patient  who  believes  his 
condition  to  be  worse  than  it  really  is  may  resort  to  illegal  meas- 
ures in  consequence  of  his  fear  that  otherwise  his  injuries  might 
not  be  deemed  sufficiently  grave ;  and  the  Office  in  like  manner 
explains  the  fact  that  those  who  receive  pensions  fight  to  the 
bitter  end  to  retain  pensions  which  have  once  been  granted  them, 
and  which  they  often  erroneously  assume  should  be  paid  them 
permanently.  This  is  certainly  an  extremely  mild  judgment,  per- 
haps appropriate  enough  in  the  case  of  "children,"  but  scarcely 
complimentary  to  the  modern  workingman,  who  is,  in  all  other 
regards,  so  proud  and  lordly.  However  it  may  be  considered  in 
the  abstract,  this  excuse  utterly  fails  when  statements  of  fact 
in  regard  to  legal  conditions  are  involved.  This  is  particularly 
true  in  the  consideration  of  the  problem  of  wages.  While  press 
and  convention  can  not  lament  bitterly  enough  the  misery,  the 
starvation  wages,  and  the  grinding  of  the  laboring  classes,  the 
allegations  of  the  insured  rise  to  incredible  heights  in  reckoning 
up  their  pension  claims,  which  include  tips,  free  beer,  clothing, 
and  the  like  to  a  degree  and  with  a  valuation  that  would  fill  the 
tax  commissioners  with  delight  if  they  were  given  similar  esti- 
mates. If  the  present  earnings  of  a  person  who  has  suffered  in- 
jury, but  who,  in  consequence  of  improved  health,  should  receive 
a  decrease  of  pension,  are  cited  as  evidence  of  such  improved 
health,  the  invariable  reply  is  that  the  workingman  in  question 
owes  this  wage  simply  and  solely  to  the  generosity  of  his  noble- 
hearted  employer.  The  fact  that,  under  all  other  circumstances, 
"blood-sucker"  is  the  gentlest  designation  vouchsafed  this  same 
employer  does  not  form  the  slightest  barrier  to  this  laudation,  and 
pensions  bring  oblations  to  an  idol  that  otherwise  is  burned  with 
fire. 

Pension  lies  unblushingly  involve  even  family  life.  Attempts 
are  made,  ever  and  again,  to  transform  the  wife  into  the  employee 
of  her  husband,  and  the  husband  into  the  employee  of  his  wife, 
as  circumstances  may  demand ;  brothers  and  sisters  become  serv- 
ants ;  and  even  children  not  yet  four  years  old  are  alleged  to  be 
regularly  employed  in  agricultural  pursuits.  In  his  old  age  the 
man  who  has  retired  from  active  life  again  becomes  a  plowboy, 
and  the  mother-in-law  who  has  been  received  into  the  household 
is  metamorphosed  into  a  nurse-girl.  This  latter  transformation 
became  especially  popular  since,  when  the  invalid  and  old-age 
insurance  law  went  into  effect  on  January  I,  1891,  persons  who 
had  already  reached  the  age  of  seventy  could  receive  pensions 

50 


only  after  proof  that  they  had  been  engaged  in  an  occupation 
entitling  them  to  insurance  within  the  three  years  previous.  The 
clever  concept  doubtless  emanated  from  Berlin,  and  spread  like 
wildfire  over  the  whole  Empire ;  and  though  at  first  regarded  as  a 
joke,  since  one  would  scarcely  think  of  treating  his  mother-in-law 
as  a  servant  with  regard  to  wages,  stamped  documents,  or  even 
giving  her  notice  to  leave,  yet  it  secured  pensions  for  many  old 
women  through  benevolent  consideration  of  the  special  circum- 
stances involved.  Accident  insurance  affected  family  relations  in 
another  way,  since,  under  certain  conditions,  it  granted  a  pension 
to  the  parents  and  grandparents  of  a  man  who  had  been  killed 
after  having  been  insured,  provided  he  had  been  their  "sole  sup- 
port." The  interpretative  genius  of  the  Imperial  Insurance  Office 
executed  one  of  its  master-strokes  in  this  ruling,  since  it  assumed 
this  presupposition  to  be  already  existent  if  the  deceased  had 
"actually  and  essentially  been  the  sole  support"  of  his  ascendants 
— if  he  had,  "in  other  words,  protected  them  against  poverty  and 
want."  This  interpretation  was  sanctioned  by  the  legislator,  and 
the  amendment  of  1900  acknowledges  that  ascendants  are  entitled 
to  pensions  if  "they  have  been  either  wholly  or  predominantly 
dependent  for  support  upon  the  deceased."  Legally,  therefore, 
those  who  are  insured  could  wish  for  nothing  more,  but  it  now 
becomes  necessary  to  make  the  facts  harmonize  in  every  detail 
with  the  demands — a  task  which  is  carried  out  with  a  zeal  anjd  a 
skill  that  would  be  absurd  were  the  point  at  issue  not  so  grave. 
No  matter  how  many  children  the  parents  may  have  had,  the  one 
who  has  been  killed  is  invariably  their  sole  support,  even  if  he  has 
been  only  a  boy  or  an  apprentice.  He  gave  his  parents  every 
pfennig  that  he  earned,  and  he  lived,  so  to  speak,  on  air,  while 
his  brothers  and  sisters,  on  the  contrary,  spent  their  wages,  no 
matter  how  ample  they  were,  exclusively  on  themselves.  Even 
the  fact  that  the  parents  in  question  draw  an  old  age  or  invalid 
pension  does  not  exclude  this  claim,  the  result  apparently  being 
a  cynical  comment  upon  insurance,  which  is  supposed  to  protect 
the  insured  against  want. 

This  most  unpleasant  section  of  our  discussion  may  be  brought 
to  an  end  with  the  statement  that  in  1909  only  16.7%  of  the  re- 
courses of  those  alleging  injuries  were  successful,  and  only  10.5% 
of  their  retrials,  these  figures  showing  a  steady  tendency  to  de- 
crease. This  fact  is,  at  the  same  time,  the  best  proof  of  the 
falsity  of  a  charge  of  prejudice  or  exaggeration  which  might 
perhaps  the  more  easily  be  made  since  no  one  has  hitherto  dared 

51 


to  discuss  these  matters  before  the  general  public,  although  they 
have  long  been  familiar  to  the  organizations  concerned. 

After  the  details  just  considered,  the  question  of  possible  check 
to  this  fraudulent  method  of  securing  pensions  becomes  too  perti- 
nent to  be  ignored.  It  is  perfectly  true  that  one  seldom  reads  of 
convictions  for  pension  frauds ;  and  there  are  very  good  reasons 
for  this  fact.  If  every  individual  guilty  of  false  allegations  in 
claims  for  pensions  were  placed  on  trial  for  his  offense,  it  would 
be  necessary  to  double  and  treble  the  number  of  our  prosecuting 
attorneys  and  criminal  judges,  with  the  result  of — nothing.  Since, 
according  to  the  more  recent  system  of  jurisdiction,  the  so-called 
factor  of  subjective  guilt  is  requisite  for  conviction  of  fraud,  it 
would  be  necessary  in  every  case  to  prove  that  the  defendant  had 
himself  been  aware  of  the  baselessness  of  his  claim.  It  is  obvious 
how  hard  it  would  be  to  prove  this  to  a  neurotic  patient,  and  this 
is  not  the  only  instance  where  such  demonstration  would  be  diffi- 
cult, since  in  all  such  cases  the  defendant  might  appeal,  with  fair 
chances  of  success,  to  the  general  uncertainty  prevailing  not  only 
with  regard  to  the  structural  details  of  working-men's  insurance, 
but  also  with  regard  to  its  aims  and  methods.  A  jury  in  East 
Prussia  was,  therefore,  entirely  consistent — though  consistent  only 
in  this  limited  sense — when  it  rendered  a  verdict  merely  of  in- 
voluntary perjury  against  a  local  magistrate  who,  in  consideration 
of  a  promise  that  he  should  receive  a  portion  of  the  pension, 
falsely  testified  that  a  certain  pension  claimant  had  been  in  his 
employ;  for,  it  was  alleged,  the  magistrate  in  question  could 
scarcely  have  foreseen  the  far-reaching  effect  of  his  statement 
in  so  difficult  a  case. 

This  ignorance,  which  constitutes  such  a  shameful  symptom  of 
the  political  immaturity  of  our  nation,  is  to  be  found  among  em- 
ployers and  employees  alike,  and  the  most  amazing  misconceptions 
are  current  in  each  and  every  stratum  of  society.  The  workingmen 
may  be  pardoned  for  frequently  believing — or  at  least  asserting — 
that  the  expenses  of  accident  insurance  devolve  principally,  or 
even  solely,  on  them,  since  that  is  part  and  parcel  of  the  stock 
doctrines  of  the  type  of  political  economy  taught  by  socialism. 
It  is  far  more  grave  that,  despite  the  extraordinary  facilities  for 
applying  for  pensions,  very  many  of  those  who  are  insured  are 
still  ignorant  of  the  proper  course  of  procedure  in  case  they  come 
within  the  category  of  the  actual  beneficiaries  of  such  insurance. 
Serious  blame  here  attaches  to  their  teachers  and  guides,  who 
do  not  attempt  impartially  and  accurately  to  explain  to  the  work- 

52 


ingmen  these  matters,  which  concern  the  laboring  classes  most 
intimately  and  most  vitally ;  for  it  is  this  ignorance  alone  which 
has  rendered  possible  the  development  of  a  maleficent  parasitical 
excrescence,  of  which  even  the  Imperial  Insurance  Office  is  forced 
to  complain,  on  the  all-nurturing  tree  of  insurance  in  the  shape  of 
the  professional  counsellors  in  legal  affairs,  the  so-called  people's 
advocates.  It  is  true  that  modern  legislation  is  far  more  kindly 
to  this  profession  than  were,  for  example,  the  Prussian  General 
Statutes,  although  no  one  would  now  be  willing  to  represent  their 
point  of  view.  Nevertheless,  it  is  beyond  all  question  that  the 
most  heterogeneous  elements  are  found  side  by  side  among  the 
people's  advocates,  and  it  is  not  always  the  aristocracy  of  this 
profession  which  devotes  itself  to  insurance  cases.  The  majority 
of  these  individuals  consider  no  claim  too  hopeless  and  no  means 
too  vile  to  earn  a  fee.  Many  of  them  go  from  place  to  place  in  the 
country,  searching  everywhere  for  pensioners  and  those  who  may 
have  suffered  some  injury,  and  egging  them  on  to  claims  which 
are  often  of  the  wildest  kind.  Others  attend  to  the  case 'by 
writing  from  a  distance,  for  it  is  a  special  recommendation  when 
the  gentleman  who  thus  writes  in  a  purely  private  capacity  has 
himself  at  some  time  met  with  an  accident  as  a  workingman,  a 
fact  which  is  particularly  emphasized  by  addressing  his  communi- 
cations to  his  "honored  fellow  sufferer."  Such  an  individual 
naturally  knows  the  laws  as  thoroughly  as  he  knows  the  wicked- 
ness of  the  insurance  carriers,  and  he  is  sure  of  an  enormous 
clientage.  A  private  letter-writer  of  this  type  is  living  in  one 
of  the  German  capitals  who,  in  consequence  of  a  nervous  dis- 
order caused  by  an  accident,  draws  a  pension  for  complete  loss 
of  earning  capacity,  but  who,  nevertheless,  if  common  report  may 
be  believed,  receives  from  this  occupation  an  income  of  thousands 
of  marks  annually.  The  exorbitant  amounts  which  must  often  be 
paid  by  the  insured  to  this  class  of  counsellors  naturally  constitute 
a  frequent  basis  of  complaints  of  the  great  expense  of  obtaining 
justice.  Unfortunately,  the  generosity  of  the  courts  shows  these 
creatures  a  degree  of  consideration  which  is  wholly  undeserved; 
individuals  whom  the  smallest  local  courts  and  the  youngest 
associate  justices  would  immediately  show  the  door  dare  to 
appear  before  the  courts  of  arbitration  as  well  as  before  the 
highest  court  for  workingmen's  insurance,  for  the  exclusion  of 
such  elements,  though  contemplated  by  the  law  itself,  is  neither 
generally  accepted  nor  rigidly  enforced.  There  are,  in  addition, 
a  great  number  of  workingmen's  syndicates,  supported  by  the 

53 


most  divergent  political  organizations,  and  the  secretaries  of  these 
syndicates  represent  the  insured  without  charge,  and  usually  in 
most  unexceptional  fashion.  Yet  the  very  fact  that,  to  preserve 
their  own  self-respect,  they  can  not  and  do  not  accept  each  and 
every  case  prevents  many  of  those  who  have  been  insured  from 
entrusting  to  them  the  prosecution  of  their  claims,  this  tending, 
in  its  turn,  to  blunt  the  secretaries'  sense  of  responsibility,  and 
again  leading  ultimately  to  an  overburdening  of  jurisdiction. 

The  ignorance  of  those  whose  services  underlie  the  whole 
structure  of  insurance  is  a  problem  no  less  grave  than  the  igno- 
rance of  those  who  are  insured.  It  has  already  been  implied 
(above,  page  18)  that  the  members  of  the  Trades  Associations 
are  in  many  respects  remiss  in  that  active  and  conscientious  rep- 
resentation of  their  interests  which  is  inherent  in  autonomy. 
Conventions  of  the  Trades  Associations  have  long  ceased,  gener- 
ally speaking,  to  attract  the  great  attendance  enjoyed,  for  example, 
by  festivals  of  choral  societies,  athletes,  and  bowlers,  especially 
as  the  Trades  Association  meetings  carry  with  them  no  copious 
drafts  of  beer.  Only  a  very  small  minority  of  employers  still 
deem  it  worth  while  even  to  receive  instruction  in  one  of  our 
numberless  clubs,  and  the  theme  of  insurance  is  popular  nowhere. 
It  has  long  been  the  regular  custom  for  masters  (whose  example 
is  followed  by  many  other  employers,  especially  in  the  open 
country)  to  pay  the  full  contributions  for  the  invalid  insurance 
of  their  servants,  and  not  to  subtract  the  half,  as  they  may 
optionally  do;  many  employers  are  entirely  unacquainted  with 
any  other  course  of  procedure,  and  others  would  doubtless  be 
absolutely  ashamed  to  do  differently.  Insurance  is  regarded  sim- 
ply as  a  tax  for  a  State  institution  which,  as  its  many  magnificent 
offices,  hospitals,  and  similar  buildings  prove,  has  more  money 
than  it  can  spend,  money  intended  simply  and  solely  to  free  the 
workingman  from  the  anxieties  of  existence.  How  many  great 
and  noble  concepts  of  profound  pedagogic  value  have  been  stifled 

L  by  this  false  idea !  A  tax  might  have  been  levied  far  more  cheaply, 
nor  would  it  have  required  the  huge  army  of  officials,  the  intricate 
mechanism  of  administration,  or  the  costly  system  of  vouchers, 

\*  and  the  like.  Insurance  was  intended  to  be  a  right  which  the  in- 
sured was  to  help  secure  by  his  own  efforts ;  and  in  this  way  he 
was  to  be  educated  to  feel  himself  part  of  the  nation  as  a  whole, 
to  take  part  in  the  life  of  the  State,  and  not  to  rely  on  the  help 
of  others,  but  rather  to  provide  for  his  own  future.  With  a 
purpose  that  was  the  fruit  of  ripe  reflection,  therefore,  the  origi- 

54 


nal  draft  of  the  invalid  insurance  law  enacted  that  the  employer 
was  obliged  to  deduct  from  the  wages  paid  half  the  sum  of  his 
contributions  to  the  insurance  fund;  but  this  time  it  was  the 
Reichstag  that,  unable  to  do  enough  in  its  benignity  and  its  crav- 
ing for  popularity,  changed  the  obligation  into  an  authorization 
which  for  wide  circles  remained  only  a  dead  letter.  Nevertheless, 
the  concept  itself  is  not  yet  entirely  forgotten,  and  only  recently 
the  Chamber  of  Commerce  at  Frankfort-on-the-Oder,  opposing 
a  projected  insurance  law  for  private  officials,  has  set  forth  in 
detail  how  "overstraining  State  protection  involves  the  grave v 
peril  of  crippling  more  and  more  that  feeling  of  personal  re- 
sponsibility which  is  so  powerful  an  incentive  to  economic  y, 
activity." 

If  even  the  State  has  been  unable  to  curb  its  complaisance 
toward  the  "so-called  poor  man,"  the  blind  philanthropy  of  our 
generation,  which  has  already  led  to  so  many  errors,  and  which 
has  become  a  favorite  theme  for  the  comic  stage,  can  not,  of 
course,  lag  behind.  In  workingmen's  insurance  it  speedily  found 
a  new  field  for  its  activity,  and  neither  before  nor  since  has  the 
fine  Latin  proverb,  "Facile  est  de  alieno  largiri"  received  such 
brilliant  demonstration.  Many  clergymen,  physicians,  and  others 
of  all  sorts  and  conditions  offered  themselves  as  advisers  of  the 
insured,  their  lack  of  technical  knowledge  being  compensated  by 
social  sentiment ;  and  the  petitions  of  these  intruders  often  revel, 
characteristically  enough,  in  the  maddest  accusations  against  the 
insurance  carriers.  Such  charges  read  as  though  that  envy  of 
the  propertyless  classes  which  is  now  proverbial  had  infected 
wide  circles,  and  as  though  workingmen's  insurance  were  to  be 
made  a  means  to  wrest  from  the  hated  wholesale  industries  some 
of  their  superfluity — another  echo  of  the  conventions  of  our 
theoretical  socialists.  Of  grave  significance,  though  in  another 
direction,  was  the  position  taken  by  our  nation  after  the  terrible 
disaster  in  the  Radbod  mines,  a  position  which  was,  moreover, 
a  bitter  proof  of  the  type  of  our  social  insight.  The  moral  effect 
of  the  horrifying  fact  that  a  large  number  of  men  in  the  prime 
of  life  had  there  suddenly  been  killed,  probably  with  the  utmost 
agony,  was  wholly  obscured  by  the  outpouring  of  an  absolutely 
senseless  sympathy  with  the  fancied  financial  needs  of  the  sur- 
vivors. In  this  regard  too  much  could  not  be  done ;  the  petitions 
vied  with  each  other  in  picturing  the  distress  of  the  families  of 
the  dead  miners;  but  no  one  gave  a  thought  to  workingmen's 
insurance,  which  at  once  intervened  and  expended  lavish  sums. 

55 


There  were,  at  most,  only  one  or  two  political  economy  journals 
that  tardily  found  time  and  courage  to  refer  to  this  shameful  fact. 
It  is  particularly  lamentable  that  many  of  the  very  men  who, 
by  reason  of  their  profession,  should  be  thoroughly  familiar  with 
the  matter  are  not  free  from  that  uncertainty  regarding  the  aim 
and  object  of  accident  insurance  which  is  here  criticized.  Many 
attorneys,  for  example,  continue  to  liquidate  claims  according 
to  the  general  fee  regulation,  and  submit  stamped  powers  of 
attorney  regardless  of  special  rules  to  the  contrary.  One  of  these 
gentlemen  recently  came  in  person  from  the  Rhine  to  Berlin 
to  plead  a  hernia  case  which,  according  to  the  system  of  juris- 
diction recognized  for  many  years,  was  hopeless;  and  he  was 
extremely  astonished  to  hear  the  judge  reprove  a  workingman 
for  ignorance  of  this  jurisdiction.  In  the  case  of  local  magis- 
trates the  determination  to  help  their  fellow  residents,  combined 
with  the  prevalent  opinion  that  insurance  has  more  money  than  it 
can  use,  often  tends  completely  to  obscure,  in  amazing  fashion, 
the  concept  of  right  and  the  love  of  truth  (see  above,  page  52). 
Here  again  the  Imperial  Insurance  Office  affords  a  confirmation 
which  seems  to  become  the  more  cogent  the  more  tortuously  it 
is  construed.  As  one  of  the  reasons  for  the  excessive  increase 
both  in  invalid  and  in  agricultural  accident  pensions  the  Office 
designates  "the  insufficient  knowledge  which  still  prevails  in 
every  quarter  regarding  the  principles  which  regulate  the  treat- 
ment and  the  decision  of  pension  cases."  It  is  true  that  these 
statements  are  to  some  degree  extenuated  by  the  promise  with 
which  the  legislator  once  recommended  his  results  to  the  general 
public,  that  workingmen's  insurance  would  aid  in  lessening  the 
burdens  of  the  poor.  Curiously  enough,  very  little  is  now  heard 
regarding  this  promise.  Even  the  literature  upon  it  is  extremely 
scanty,  and  is  practically  restricted  to  a  theoretical  discussion 
as  to  how  insurance  should  or  can  diminish  the  burdens  of  poor 
relief;  the  extent  to  which  this  result  is  actually  attained  is,  as 
a  rule,  entirely  ignored.  The  most  recent — and  very  careful — 
study  in  this  field  (by  Zahn,  in  the  Bulletin  des  assurances  sociales  \ 
for  1910)  seeks  to  prove,  it  is  true,  that  this  diminution  of  burdens 
has  actually  been  effected,  and  it  is  alleged  that  a  similar  admis- 
sion is  made  by  those  engaged  in  poor  relief  and  in  the  insurance 
institutions.  When,  however,  Zahn  closes  with  the  declaration 
that  "In  reality  expenditures  for  the  poor  have  increased  almost 
everywhere,  both  as  regards  the  number  of  those  who  are  sup- 
ported and  as  regards  the  degree  of  support  which  is  given  in 

56 


individual  cases,"  it  is  scarcely  possible  to  avoid  the  inference 
that  this  is  yet  another  of  the  blessings  of  insurance  which  have 
utterly  failed  to  be  realized ;  and  the  absolute  silence  of  the  Im- 
perial Insurance  Office  regarding  this  matter  is  highly  significant. 
Attention  has  already  been  drawn  (above,  page  49)  to  the 
difficult  situation  of  the  physicians,  who  stand  between  the  insured 
who  wishes  to  retain  his  pension  and  the  insurance  carrier  who 
wishes  to  cancel  it.  The  struggles  of  the  physicians  with  the  sick 
funds  already  constitute  almost  a  standing  rubric  in  our  news- 
papers, and  both  together  are  amply  sufficient  to  show  the  danger 
which  confronts  this  noble  and  important  profession — the  danger 
of  forfeiting  both  their  own  self-respect  and  the  esteem  of  the 
public;  and  this  danger  is  gravely  increased  in  yet  other  respects 
by  workingmen's  insurance.  Naturally  the  social  zeal  of  the  day 
casts  its  spell  over  many  physicians  and  leads  them  to  play  the 
role  of  benefactors  of  the  poor — of  course,  at  the  expense  of  the 
Trades  Associations.  Many  expert  opinions,  even  by  recognized 
authorities,  by  men  who,  standing  in  the  limelight  of  public  life, 
ought  rightly  to  estimate  the  importance  of  their  tasks  and  the 
limitations  of  their  special  knowledge,  read  like  partizan  screeds ; 
and  their  authors,  abandoning  the  domain  of  their  own  profession, 
revel  in  legal  arguments  which,  however,  as  is  proverbially  the 
case,  almost  invariably  conclude  unfavorably  to  jurisprudence. 
Yet  it  is  only  in  the  most  sporadic  instances  that  there  is  demon- 
strable evidence  of  conscious  prejudice  in  favor  of  the  pension 
claimant  personally,  or  even  against  the  purse  of  the  insurance 
carrier.  Nevertheless,  it  is  occasionally  possible  to  see,  by  dint 
of  long  practice,  that  a  certain  expert  opinion  has  been  colored 
in  the  interests  of  political  partizanship  or  because  the  plaintiff 
is  a  fellow  countryman  of  the  physician  in  question;  and  the 
fact  that  the  services  of  a  particular  physician  are  invoked  with 
peculiar  frequency  by  those  who  are  insured  often  serves  as  an 
indication  of  his  trustworthiness.  A  physician  who  has  the 
reputation  of  being  "generous"  in  his  diagnoses  of  those  who 
have  been  injured  by  accidents  is  certain  of  a  host  of  patients, 
and  the  courts  of  honor  of  the  medical  profession  have  repeat- 
edly been  forced  to  interfere,  since  this  generosity  has  led  to  a 
suspicious  disturbance  of  scientific  knowledge.  A  melancholy 
counterpart  is  furnished  by  the  numerous  cases  in  which  a 
physician  of  probity  renders  an  expert  opinion  unfavorable  to 
the  pension  claimant,  begging  that  the  claimant  in  question  be 
kept  in  ignorance  of  this  opinion,  since  otherwise  the  physician 

57 


concerned  would  lose  his  practice,  while  his  neighborhood  would 
be  made  too  hot  to  hold  him. 

It  is  practically  undeniable  that  there  is  some  internal  con- 
nection between  the  excessive  benevolence  of  the  jurisdiction, 
the  untruthfulness  of  the  pension  claimants,  and  the  ignorance 
of  the  general  public,  however  divergent  these  factors  may  be 
deemed,  especially  in  their  ethical  aspects.  The  root  of  the  entire 
evil  is  that  the  legal  character  of  the  whole  system  of  working- 
men's  insurance,  though  primarily  developed  in  exact  detail,  has 
not  become  a  vital  force,  and  the  almost  senile  trait  of  indolence, 
so  characteristic  of  our  age,  has  allowed  a  perilous  development 
of  the  germ  latent  in  this  root.  No  estimate  of  the  practical 
efficiency  of  workingmen's  insurance  can  altogether  ignore  the 
ethical  intentions  regarded  by  the  legislator  as  a  necessary  com- 
ponent of  his  task,  even  though  precise  valuation  of  these  inten- 
tions perhaps  falls  less  within  the  scope  of  technical  knowledge 
than  within  that  of  feeling  and  political  insight.  Not  only  are 
the  ethical  effects  inextricably  confused  with  the  material,  as  has 
already  repeatedly  been  shown  in  the  course  of  the  discussion, 
but  the  hope  of  favorable  results  within  the  ethical  sphere  itself 
was,  in  the  last  analysis,  the  strongest  incentive  to  make  the 
great  hazard  and,  to  adopt  the  phrase  of  the  time,  to  take  the 
leap  into  the  dark.  One  of  these  effects  was  to  be  a  reconciliation 
of  social  antitheses  and  a  restoration  of  internal  peace.  The 
actual  result  in  this  respect  has  been,  unfortunately,  utter  failure. 
Those  who  are  insured  refuse  to  recognize  the  protection  and 
assistance  afforded  them  by  the  insurance  laws.  Again  and  again 
the  speeches  of  their  leaders  and  that  portion  of  the  press 
which  ostensibly  represents  their  interests  repeat  the  insults 
with  which  the  Sozialdemokrat  once  hailed  Bismarck's  great 
work  of  reform;  yet  it  is  in  itself  a  high  compliment  to 
characterize  as  an  "improved  poor  relief"  a  legislation  intended 
and  adapted  expressly  to  protect  the  financially  weak  against 
the  humiliation  of  poor  relief.  And  while  in  workingmen's 
insurance  we  have  before  our  eyes,  in  daily,  blissful  opera- 
tion, the  most  towering  structure  of  the  inequality  of  the  law — 
as  may  be  learned  simply  from  the  section  on  promotion  of 
welfare  in  the  report  of  the  Imperial  Insurance  Office — the  idiotic 
charge  of  "robbery  of  the  people's  rights"  pursues  its  way  un- 
checked. There  is  an  element  of  tragedy  in  the  bold  public 
declaration  of  the  Secretary  of  State  for  the  Interior  on  February 
18,  1910:  "It  has  proved  impossible  for  us  to  bridge  the  deep 

58 


gap  rent  by  the  economic  struggles  of  recent  decades."  Un- 
fortunately, we  may  go  still  further,  and,  in  harmony  with  the 
monograph  of  Ritter  to  which  allusion  has  already  been  made 
(above,  page  18),  the  Denkschrift  des  Verbandes  deutscher 
Baugewerks-Berufsgenossenschaften  zur  Jubelfeier  der  Unfall- 
versicherung,  and  many  other  expressions  of  opinion,  we  must 
hold  workingmen's  insurance  guilty  of  essential  aggravation  of 
the  general  unrest.  No  law  can  help  all  who  desire  its  aid,  not 
even  all  who  rightly  desire  such  aid;  nor  can  any  law  exclude 
all  who  are  unworthy.  If,  in  addition  to  all  this,  insurance  juris- 
diction is  liable,  as  has  been  shown,  to  the  influence  of  vague 
subjective  considerations,  the  granting,  denial,  and  cancellation 
of  pensions  only  contribute,  in  countless  cases,  to  the  shattering 
of  the  faith  of  the  honorable  and  the  dishonorable  alike,  both 
in  the  justice  and  in  the  efficiency  of  our  State  institutions.  Nor 
is  this  all.  By  virtue  of  the  marvelous  self-equalization  inherent 
in  the  universe,  every  exaggeration  produces  a  corresponding 
counteraction.  Even  the  most  benevolent  minds,  firmly  con- 
vinced that  all  that  is  done  by  way  of  social  protection  is  done 
for  conscience'  sake  and  as  a  Christian  duty,  are  beginning  to  ask 
whether  the  ends  which  have  demanded  such  great  sacrifices  of 
freedom,  toil,  and  money  have  really  been  attained.  If,  then, 
the  answer  is  "No,"  they  begin  to  be  weary  of  the  excess  of  pro- 
tection that  has  been  lavished  on  the  insured,  and  they  begin  to 
think,  "We,  too,  are  still  here."  They  compare  their  position 
with  that  of  the  workingmen,  and  find  that  they  can  not  pamper 
themselves  with  such  magnificent  medical  aid  or  such  expensive 
nursing,  nor  can  they  look  forward  to  the  future  and  its  vicissi- 
tudes with  an  equal  degree  of  unconcern.  They  next  find  these 
heavy  expenditures  irreconcilable  with  the  repeated  promises 
of  protection  for  the  middle  classes,  and  they  accuse  the  Govern- 
ment of  untrustworthiness,  thus  strengthening  the  sullen  discon- 
tent which  is  so  perilous  for  the  State  since  it  cripples  many 
forces  of  great  value;  and  sometimes,  with  a  perversity  that  is 
only  too  common,  they  even  become  supporters  of  Social  De- 
mocracy. In  any  event  the  party  of  revolution  is  here  again  helped 
to  victory  by  the  very  institution  created  to  combat  it.  Unhappily, 
neither  the  way  of  escape  from  this  vicious  circle,  which  has 
already  repeatedly  been  mentioned,  nor  the  method  which  should 
be  employed  to  attain  the  lofty  end  desired  is  obvious.  Especially 
deep — and  this  is  the  last  point — is  the  silence  which  broods  over 
a  concept  frequently  expressed  in  essential  portions  of  the  insur- 

59 


ance  laws — if  the  State  protects  its  citizens  against  anxiety  and 
want  by  assuring  them  an  ample  livelihood,  it  is  also  justified  in 
opposing  with  a  double  measure  of  decision  all  attempts  at 
revolution.  That  in  affording  this  protection  the  State  has  done 
all  that  is  humanly  possible,  and  that  nowhere  else  on  earth  has 
this  degree  of  protection  been  even  distantly  approximated,  is 
too  evident  to  require  demonstration  here.  On  the  other  hand, 
there  is  no  record  that  it  has  ever  made  any  use  whatsoever  of 
its  right  of  self-defence. 

On  the  basis  of  a  service  of  more  than  twenty  years  in  the 
governing  board,  I  have  sought  to  set  forth  the  operation  of  our 
workingmen's  insurance,  not,  as  it  might  appear  to  the  super- 
ficial observer,  as  its  juristic,  economic,  or  political  foe,  or  even 
as  the  blind  fool  who  fails  to  recognize  that  the  blessings  of 
this  insurance  can  not  be  adequately  described  even  by  the  usual 
phrases  of  unconditional  laudation.  But  I  have  been  faithful 
to  the  concept  which  has  become  a  part  of  me,  which  I  have 
retained  from  my  service  as  a  judge,  and  which  I  have  repre- 
sented unwaveringly  from  the  beginning  to  the  end  of  my  activity 
— that  justice  should  not  be  subordinated  to  mere  kindly  feelings ; 
and  I  have  written  in  the  hope  that  I  might  render,  even  now, 
some  aid,  even  though  it  be  but  small,  to  this  great  achievement 
to  which  I  once  devoted  myself  with  joy  and  with  enthusiasm. 

It  has  been  felt  by  many  to  be  a  faulty  feature  of  my  study  that 
I  have  not  entered  upon  the  question  of  what  is  next  to  be  done, 
and  how  the  unhappy  features  whose  existence  is  tacitly  granted 
by  every  one  may  be  abolished.  Though  the  answer  falls,  strictly 
speaking,  outside  the  scope  of  my  article,  a  few  words  may, 
nevertheless,  be  devoted  to  the  problem.  This  question  has  only 
too  much  justification  so  long  as  the  Pandora's  box  of  social  poli- 
tics is  unexhausted,  which  is  by  no  means  the  case.  Unceasingly 
resounding,  and  an  especial  favorite  as  a  bid  for  votes,  the  demand 
for  "perfecting  insurance" — the  insurance  of  survivors — is  an 
old  promise  of  more  than  one  party;  the  insurance  of  private 
employees  is  as  enthusiastically  desired  in  some  quarters  as  it 
is  emphatically  repudiated  in  others;  and  the  fair  Utopia  of  in- 
surance of  the  unemployed  is  pressing  hard  upon  the  municipal 
communities.  In  addition  to  all  this,  labor  has  long  been  ex- 
pended on  that  great  Imperial  Insurance  Regulation  from  which 
optimistic  souls  expect  the  fulfillment  of  every  wish  within 
this  sphere.  Whatever  portion  of  these  plans  succeed  or  fail, 
first  of  all  the  organization  must  be  simplified,  and  simplified 

60 


essentially.  Only  the  smallest  minority  have  even  the  faintest 
concept  of  the  absolutely  enormous  machinery  which  insurance 
maintains.  In  addition  to  the  Imperial  Insurance  Office  there 
are  eight  District  Insurance  Offices,  which,  with  a  delimitation 
of  functions  that  is  by  no  means  always  clear,  supervise  66  indus- 
trial Trades  Associations  with  14  insurance  institutions,  48  agri- 
cultural Trades  Associations,  and  209  Imperial  and  State  ex- 
ecutive committees,  as  well  as  545  municipal  executive  com- 
mittees, which  the  district  central  authorities  have  declared  com- 
petent to  assume  the  burdens  arising  from  accident  insurance ; 
besides  which  invalid  insurance  has  31  insurance  institutions  and 
10  funds.  It  may  readily  be  imagined  what  an  army  of  officials 
of  the  most  various  ranks  is  required  by  this  organization,  and 
what  mountains  of  paper  and  oceans  of  ink  are  conquered  by 
such  a  host.  Even  this  is  not  all,  for  there  are  still  the  innumer- 
able sick  funds  and  the  officials  employed  in  these  tasks  by  the 
State  and  municipal  authorities.  To  remedy  this  condition  of 
affairs  appears  to  me  to  be  the  most  important  problem  of  all, 
especially  as  this  would  perhaps  realize  the  desire  of  the  Imperial 
Insurance  Office  to  be  relieved  of  the  burden  of  jurisdiction,  and 
also  Rosin's  idea  that  accident  insurance  is  really  superfluous. 
This  does  not  imply  that  the  Trades  Associations  should  be  abol- 
ished. That  would  be  the  most  serious  mistake  that  could  be  made, 
for  if  anything  has  stood  the  test,  it  has  been  the  Trades  Associa- 
tions, and  they  are  indispensable  as  being  the  most  appropriate 
representatives  of  circles  which  now,  despite  all  juggling  with 
figures  on  the  part  of  their  opponents,  bear  by  far  the  greatest  bur- 
den of  the  expenses  of  insurance.  But  will  "the  legislator"  have 
the  courage  to  resort  to  measures  that  shall  be  really  incisive? 
And  will  the  reform  that  is  desired  not  be  ruined,  as  so  many  other 
projects  have  been,  by  the  curse  of  the  parliamentary  craze  for 
making  law  ?  It  would  seem  so,  and  yet  no  tears  should  be  shed 
for  that.  It  is  better  to  labor  on  with  the  old  laws,  faulty  though 
they  be,  and  with  the  old  organization,  despite  its  clumsiness,  than 
to  experiment  anew  with  creations  still  more  awkward,  and 
devoid  of  a  uniform  guiding  concept.  Yet,  after  all,  practical 
results  are  the  main  thing;  with  the  best  of  laws  they  can  work 
calamity,  and  with  the  worst  of  laws  they  can  fulfill  their  pur- 
pose. Here  we  would  again  reach  the  conclusions  with  which 
I  have  already  (above,  page  58)  summarized  the  results  of  my 
criticisms.  The  source  of  the  trouble  lies,  when  rightly  con- 
sidered, within  the  political  sphere,  on  which  it  is  neither  the 

61 


province  nor  the  purpose  of  my  task  to  enter.  Even  in  this 
respect  I  have  doubtless  made  my  position  sufficiently  clear,  and 
it  is  only  to  avoid  all  suspicion  of  cowardice  that  I  state  it  once 
again :  workingmen's  insurance  can  be  truly  beneficial  in  its 
operation  only  when,  free  from  all  exaggeration  and  excess,  and 
especially  from  conscious  or  unconscious  subservience  to  the 
lower  classes,  it  works  as  an  institution  of  the  State,  as  impartial 
as  every  other  kindred  institution. 

In  an  age  which,  in  Prince  Billow's  words,  can  not  abase  itself 
low  enough  before  "King  Mob,"  this  judgment  has  scant  pros- 
pect of  success.  This  was  self-evident  to  me  from  the  very 
instant  that  I  began  my  task,  yet  I  deem  it  a  deed  well  done  to 
have  called  attention  once  again  to  the  all-pervading  cancer  that 
is  destroying  the  vitals  of  our  State. 

Full  boldly  have  I  dared, 
And  I    repent  me  not! 


t>2 


rTY  OF  CALIFORNIA  LIBBAR 


THIS  BOOK  IS  DUE  ON  THE  LAST  DATE 
STAMPED  BELOW 


AN  INITIAL  FINE  OF  25  CENTS 

WILL  BE  ASSESSED  FOR  FAILURE  TO  RETURN 
THIS  BOOK  ON  THE  DATE  DUE.  THE  PENALTY 
WILL  INCREASE  TO  SO  CENTS  ON  THE  FOURTH 
DAY  AND  TO  $1.OO  ON  THE  SEVENTH  DAY 
OVERDUE. 


80 


JUU 


LD  21-100m-7,'40 (6936s) 


[     Gaylord  Bros..  Inc. 

Stockton,  Calif. 
H1    T.  M.  Re0.  U.S.  Pat.  Off 


THE  UNIVERSITY  OF  CALIFORNIA  LIBRARY 


